When you run a small business, the line between work and personal life is often blurred. You may find yourself wondering whether your personal auto insurance policy is sufficient to cover your work vehicle, or if you need to shop for a commercial auto insurance policy.
The answer to that question depends on the type of vehicle you drive, and how it is used for business purposes.
You need a commercial auto insurance policy if:
- The vehicle is clearly a work vehicle, and you use them for work.
- If you use the vehicle to make business-related deliveries. For example, you work as a caterer, and use your vehicle to deliver wedding cakes.
- You use the vehicle to transport passengers in exchange for money.
- You have employees who sometimes drive the vehicle.
- You need more liability protection than you personal auto insurance policy can provide. Generally speaking, $500,000 is the absolute minimum amount of liability protection a business should carry on their vehicles.
Is commercial auto insurance worth the premiums? If you have an accident while using your vehicle for business purposes, your personal auto insurance carrier will probably deny the claim. You will have to cover the cost of repairs or replacement yourself, but that isn’t the end of the story. If you or your employee were at fault in the accident, you could be sued by the other party. In this case, failing to carry the appropriate amount of commercial auto insurance on your work vehicle could cost you thousand settlements.