The state mandates coverage minimums for commercial vehicles just like it does for personal cars. Here’s what you need to know.
- Commercial auto insurance differs from your personal policy
- Florida has commercial insurance minimums you must meet
- Some optional add-ons are highly recommended
- The cost is dependent on your policy and company vehicles
Operating a successful business isn’t easy. Each day brings new challenges that must be met, but you also have to constantly keep your mind on the big picture and everything it entails.
One aspect that you don’t want to overlook is business insurance, which protects your company, its assets, and its employees if the unforeseen occurs. You’ll want to learn about various insurance options early in your career as a business owner in case you end up on the wrong side of a lawsuit or experience injury or property damage.
Commercial auto insurance, for example, is essential if you have a fleet or operate a personal vehicle for business-related reasons. Here are the answers to some common questions regarding the basic auto insurance requirements for commercial vehicles in Florida.
What is commercial auto insurance?
Commercial auto insurance applies to any vehicle used for business purposes. While cargo vans, utility trucks, taxi cabs, 18-wheelers, and delivery cars might pop into your head when you think of commercial vehicles, the term applies to any car, truck, or other vehicle a company or its employees use for business.
This type of insurance isn’t limited by the vehicle’s ownership; it can provide coverage for rented, leased, or hired cars your company uses. You can even extend it to your employees’ personal vehicles if they’ll be using them while on the clock. Commercial insurance is mandatory in Florida, so make sure you learn more about it if your company requires driving as part of the job.
Can I use my personal insurance?
No, you can’t use your personal insurance policy to cover a commercial vehicle. The reason is that commercial vehicles carry more risk because they’re on the road more often and sometimes carry valuable cargo and equipment. The result is a riskier policy for the insurance company.
Since driving for commercial reasons comes with more risk, your insurance agency will want to price the premiums differently. Failing to invest in commercial auto insurance could lead to the insurance provider rejecting your claim, leaving your company in significant financial distress after an accident.
What requirements do I need to consider when buying commercial auto insurance?
The basic auto insurance requirements for a commercial policy in Florida are pretty simple. You must have $10,000 of personal injury protection and $10,000 of property damage liability. However, larger vehicles require additional insurance because they’re more expensive and can do more damage when involved in an incident.
For example, a commercial vehicle with a gross weight of more than 26,000 pounds but less than 35,000 pounds needs an additional $50,000 in liability coverage. Likewise, a vehicle weighing between 35,000 and 43,999 pounds requires an additional $100,000 of liability coverage, and a vehicle weighing 44,000 pounds or more needs $300,000 in excess liability insurance.
Keep in mind that these numbers are the required minimums – they probably aren’t enough to adequately protect your business. Looking at some insurance add-ons is advisable because they will keep your company safe if a fleet vehicle is involved in a significant crash.
Are there elective insurance options?
Yes, there are plenty of elective insurance options you’ll want to consider before finalizing your policy. These policy additions will ensure that you don’t have to worry about your company vehicles while they’re on the road. They also protect against lawsuits if you or an employee injures another driver.
First, there’s bodily injury liability, which covers injury to another person involved in an accident with your company vehicle, as well as your legal expenses if the other party sues. You can also upgrade your property liability coverage. This policy pays for any damage that one of your company vehicles does to another party’s personal property. Let’s face it, $10,000 isn’t going to cover much if your driver hits something, so upgrading is probably worth it.
Next, you can invest in add-ons that cover hired, borrowed, or non-company-owned vehicles your business uses for commercial purposes. These policies cover physical damage to property or the car your employees use to conduct business. This add-on also applies to your employees’ personal vehicles when they use them for business reasons.
You might consider three other common elective insurance options: medical, collision, and comprehensive. A medical policy covers any health-related costs the driver or passengers encounter after an accident, while collision pays for your vehicle’s damage. Comprehensive insurance could be vital, too, because it protects against non-accident-related damage such as flooding, theft, wind, and fire.
Finally, you might consider adding uninsured motorist coverage to your policy, especially if your employees will be carrying expensive equipment or inventory. This option covers the damage if one of your vehicles is hit by a driver who doesn’t have enough insurance to pay for the damage.
Each of these add-ons will bring additional expenses, but the result is full protection for your business. Your insurance policy’s cost will also depend on the vehicles in your fleet, what they’ll be carrying, how much time they’ll spend on the road, and various other factors.
Find your commercial vehicle insurance policy
Looking into multiple insurance options and speaking with a professional will guarantee that you have adequate coverage. It will also help you understand the ins and outs of commercial auto insurance and how vital it is to the long-term health of your business.
Avante Insurance offers home, auto, and commercial insurance to individuals and businesses in South Florida. Our experienced team will go over your company’s basic auto insurance requirements and recommend a policy that provides the coverage your business needs. Contact Avante Insurance for more information on our commercial auto insurance options.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.