Commercial auto insurance saves significant hassle in the future

Key takeaways

  • Business owners should learn the differences between commercial and personal car insurance
  • Commercial auto insurance applies to all vehicles used when conducting business
  • The right insurance type is essential for business owners
  • An insurance agent can walk you through the process

Using a personal vehicle for work purposes is a widespread practice, but does it offer adequate financial protection if you’re in an accident? The reality is that commercial car insurance is necessary when completing work tasks in a personal vehicle because your personal policy might not cover you. If you injure another person or damage some property, you could be responsible for significant losses, and it might even cost you your business.

Commercial car insurance covers your personal vehicle when you’re using it for business purposes. It also applies to company vehicles your employees drive while on the clock. 

Here’s some information explaining the differences between commercial and personal auto insurance in Florida.

What a commercial insurance policy covers

Before deciding if you need a commercial auto insurance policy, you’ll want to learn what it covers. Much like a personal policy, a commercial policy covers liability, medical payments, uninsured motorist coverage, and comprehensive and collision. 

Liability offers financial protection if an accident hurts another driver or damages property. Some commercial insurance policies also pay your legal bills. This liability coverage is vital because if you or an employee injures another driver while on the job, the other driver could sue your company. Many small businesses don’t have the resources to recover from a significant lawsuit, so investing in the right insurance is an invaluable business precaution. 

Medical payment insurance covers the hospital bills of the driver and passengers, regardless of who is at fault. If you’re a small business owner without health insurance, having this added commercial coverage could keep you out of debt while recovering from injuries sustained in a crash. 

In some cases, another car might hit your vehicle, and the driver might have inadequate or no insurance. You’d be out of luck in this situation, but some commercial insurance plans offer uninsured motorist coverage. This insurance also covers you if you’re victimized by a hit and run and can prevent you from paying out of pocket for damages.

Finally, your commercial policy should offer comprehensive and collision coverage. These policies protect the vehicle against theft, damage, vandalism, flood, fire, and other potential hazards

Your commercial insurance policy could offer other coverage types, including rental reimbursement, towing and labor, and lease gap coverage. Remember that your commercial policy won’t cover tools and equipment left in the vehicle because you’ll need different business insurance to handle those elements.

The differences between personal and commercial policies

Commercial auto insurance might seem the same as a personal policy, so what is the difference?

Typically, personal auto insurance covers you when using the vehicle for personal reasons. Those reasons could include going to the grocery store, taking the family on vacation, or driving to and from work. A commercial policy provides coverage when you’re conducting work-related business

Your commercial insurance policy might have higher premiums because you could need more coverage in those situations. It should also have higher coverage limits to go along with the increased premiums. Commercial insurance is specific to the risks and expenses of conducting company business. 

However, it is worth noting that you don’t need commercial insurance if you use your personal vehicle for the occasional business use. There are policies available that cover you in those situations; you will want to be clear about how you use your car when purchasing insurance. 

Speak with an insurance agent to ensure you have the right policy to meet your needs

Who needs commercial car insurance?

Commercial auto insurance is vital if you own a small business, and your employees regularly drive company vehicles. Your personal policy will not cover these employees, and an accident could leave you in significant financial jeopardy.

Likewise, if your employees travel in their personal vehicles for work-related reasons, your commercial auto insurance policy should cover them if they’re in an accident. This insurance policy differs from insuring company vehicles for this purpose but investing in it can protect you from lawsuits. 

Small business owners should also invest in commercial auto insurance if they drive for cash, log significant mileage visiting job sites or store locations, or transport items for work. 

If you grab coffee for the office every morning, drive employees to an after-hours gathering, or commute to a single job site, you don’t need commercial auto insurance. However, a commercial insurance policy is necessary if you deliver goods to customers, drive clients to showings, visit multiple job sites daily, or transport work equipment in your vehicle. 

In Florida, commercial auto insurance policies include $10,000 of personal injury protection and $10,000 of property damage liability. However, those amounts will not provide adequate coverage for your business. You’ll want to speak with an expert to decide how much coverage you need and develop an insurance plan that meets your needs.

Get the commercial auto insurance help you need

Comparing commercial and personal auto insurance is confusing, because it is possible to use your personal vehicle for some business-related excursions. It’s best to contact an insurance professional for advice because you don’t want to end up without coverage if you’re in an accident. 

Avante Insurance offers home, auto, and commercial insurance in southern Florida. Our team can recommend a policy that covers you and your employees in all situations, minimizing your risk when using company or personal vehicles. Contact Avante Insurance for more insight on the differences between commercial and personal car insurance.

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.