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Commercial auto insurance is one of the
most important aspects of your business
insurance program. If your business uses a
vehicle, or many vehicles, you need commercial
auto insurance and you will want to ask your
business insurance professional some important
questions. You will also want to provide your
business insurance professional with a complete
picture of your vehicle use.
Consider the following points and ask the
following questions.
How Many Vehicles and Drivers Will the Business
Insure?
Commercial auto insurers often separate coverage
types based on the number of vehicles and
drivers to be insured. Fleet insurance is an
option for businesses that will have a number of
vehicles and drivers. The number of vehicles
differs with each insurer and may depend on the
class of vehicle. But, fleet insurance may be a
less expensive alternative than individual, per
vehicle policies.
What is the Policy Definition of Commercial Use?
Your personal auto policy will exclude coverage
for commercial uses of your vehicle. A
commercial policy will establish a definition of
commercial use as well. It is important that you
read the definition and discuss this with your
insurance professional. If there is any
question, it is better to obtain a commercial
auto policy so that, in case of an accident,
there is no chance of being uninsured.
How Can You Lower Premium Costs?
Commercial auto business insurance premiums can
be lowered by:
-Business Location - the location of the
vehicles determines premiums for theft.
-Driver Records - hire only qualified drivers
with safe driving records.
-Choice of Vehicle - sales people may want
sports cars, but five-star safety rated,
domestic, mid-sized sedans have the lowest
premiums.
-Deductibles - can your business afford part of
the risk and maintain a high deductible? If so,
your premiums will be lower.
-Safety and Anti-Theft Devices - alarms, GPS
tracking, air bags, seat belts, and other such
devices can significantly lower premiums.
Special Commercial Coverages and Considerations.
Certain businesses must adhere to federal and
state regulatory standards in the operations of
their vehicles. For example, if your business
will be hauling cargo interstate, there are
specific Department of Transportation
requirements for insurance that must be met. You
will need to make sure you and your insurance
professional have a thorough understanding of
those requirements. Also, if you will be
delivering or hauling for others or using
other's equipment such as leased trailers or
rental equipment, you will need hired or
non-owned vehicle coverage.
Who is the Insured?
Make sure you know the insured. Sound simple?
Maybe. But, all to often businesses set up a
leasing company to lease equipment to the main
company and the leasing company is the titled
owner of the vehicles. A common mistake is to
identify the main company and not the leasing
company as the titled owner on the policy. Or,
the dba of the company and not the full name of
the company is listed. You want the full name of
the company as an insured, the titled owner, any
affiliates, and dba, and all employees as
insureds on your commercial auto policy.
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