14 minute read
Whether you’re an electrician driving from site to site or a florist delivering beautiful bouquets — if you own a small business that requires the use of a vehicle, you’ll need corporate auto insurance. Many small business owners think they’re protected under their personal policy, but it’s important to understand the differences between the two types of coverage so you’re not leaving yourself vulnerable to risk.
- Catering services
- Contractors traveling between jobsites
- Limousine services
- Taxi services
What’s covered by commercial auto insurance?
Every policy is different. At TruShield, we customize our small business policies to make sure you’re getting the coverage you need for your business’ unique needs.
- Injuries to you, your employed drivers as well as passengers. Your commercial auto insurance policy could help with medical expenses and lost wages that are caused during a covered accident.
- Replacement car coverage. If you’re involved in a covered accident and require a temporary rental car to continue your day-to-day operations, your commercial auto insurance policy can help with this cost.
- If your small business requires you to take your vehicle to other provinces or states, you should consider additional coverages to ensure you, your employees and any passengers would be protected during those types of trips.
If you’re unsure whether or not your small business needs commercial auto insurance, here are a few questions you could ask yourself that may help clarify.
Do you need commercial auto insurance?
- Who owns the vehicle? This refers to whether the vehicle’s ownership is in your name, or your business’ name. If it’s registered to your business, and is used primarily for business needs on a daily basis, it should have a commercial auto insurance policy protecting it. If you’re a sole proprietor running a small business out of your home, and you don’t regularly make deliveries or travel from jobsite to jobsite—your personal auto insurance coverage is probably enough for now.
- How is the vehicle used on a daily basis? This will be a key indicator in deciding what type of auto insurance coverage is right for you. Let’s say you’re an electrician, and you travel between customers’ properties all day. You keep your expensive tools and equipment in your truck while traveling. If you’re involved in an accident and those tools are damaged, you may not be able to rely on your personal policy for the repair costs. If your vehicle is used for any of the following reasons on an on-going basis, you should consider commercial auto insurance coverage:
- You transport or deliver goods, materials or merchandise
- You transport equipment or tools
- Your vehicle is used for driver training
- You transport customers for any reason (for example, you operate a limousine service or taxi service)
- What type of vehicle do you operate? Sometimes, determining what kind of coverage you need is simply based on what kind of vehicle you drive. Commercial vehicles such as trucks, tractors or trailers often cause more damage if they’re involved in an accident and your coverage should reflect that. Even large SUVs or Jeeps that are used commercially could require coverage above and beyond your personal policy. Anything that’s specifically designed for construction or maintenance purposes should also have commercial auto protection.
- Do you drive for a ridesharing service? Ridesharing companies are becoming much more prevalent in recent years and more and more drivers are looking to them for sources of additional income. If you take part in a ridesharing service, you should always check with your insurance provider to see if your personal auto policy allows for ridesharing and if you require any additional commercial insurance coverage.
Think commercial auto insurance is what your small business needs?
Other coverage options to consider:
Commercial general liability insurance: Commercial general liability (CGL) insurance is designed to protect you and your business from a loss if you’re found legally liable for bodily injuries or property damage to a third party caused by the product you sell or the service you provide. CGL insurance can also offer protection in situations where you or your employees are conducting business offsite.
Product liability insurance: Product liability insurance is often included in a CGL policy, but not always. It’s important to double check that your small business insurance policy does protect you from risks associated with product liability claims.
Cyber event expense insurance: Cyber attacks are an ongoing threat to small businesses and have continued to rise recently. Cyber event expense coverage is designed to help small businesses that rely on technology mitigate some of the expenses that may incur as a result of a cyber hack.
Professional Liability: If one of your clients or customers claims your advice caused them a financial loss, your professional liability coverage can help you recover from the financial consequences that may incur. This coverage is also known as errors and omissions (E&O) coverage.
Property insurance: As a small business owner, you likely rely on your property, tools, equipment and technology to help keep your business running. If one of those key pieces of the puzzle was damaged and needed repair, you may not be able to continue operations. This is when you need property insurance coverage.
Equipment breakdown insurance: Your equipment is covered in your property insurance policy for damage caused by external sources, such as fire, floods and weather damage; however, you may not be covered for electrical or mechanical damage. In these situations, you’d look to your equipment breakdown insurance.