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Company Car? Things to Know About Commercial Auto Coverage

Does your business need commercial auto coverage?  If you use a vehicle for work, you probably need a commercial policy. Many small business owners are excited to purchase a company car; however, what they don’t realize is that their personal auto insurance policy may not protect them if they are involved in an accident while using the vehicle for business purposes. Depending on whether your personal auto insurance policy contains a "business-use” exclusion, your liability insurance may not cover the car accident and you may be personally liable for damages to anyone who was injured in the crash. 

“Business-use” exclusions are included in most personal auto insurance policies in Michigan and allow the insurance company to deny liability coverage for accidents caused by the insured person while using her personal car or truck for business purposes.

 A few things to consider: 

Who Owns and Drives the Vehicle - If your vehicle is owned by a business, it is likely you will need a commercial auto insurance policy. The type of policy you need also depends on how often the vehicle is used and what it's used for.

 How the Vehicle is Used - If you use your vehicle for business purposes, you'll probably need a commercial auto insurance policy. If you're a sole proprietor who only travels to 1 or 2 job sites a day, or just use your vehicle for commuting, you might only need a personal auto insurance policy.

 The Type and Weight of the Vehicle - If the vehicle you drive is heavier than a normal size pickup or SUV, like a dump truck, tow truck, or semi truck and commercial trailer, you might require a commercial auto insurance policy. Heavy duty vehicles can cause more damage if they're involved in an accident and sometimes require special insurance coverages.

Required Business Liability Limits - If your business vehicle requires higher liability limits, you will probably need a commercial auto insurance policy. Commercial auto insurance policies typically offer higher limits than personal auto insurance policies.

This is one of those insurance questions that it never hurts to ask! We'd rather do a consultation before we run into a claims situation so please call our office today!