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March252014

Auto Insurance For Business - A Cost Effective Way To Minimize Your Liability

Business auto insurance

When it comes to running a business there are many insurance policies which can be purchased to minimize liability; however, one of the most overlooked items is auto insurance for business purposes. Even for companies that do not run fleets or own company cars, if employees ever need to use their personal cars for company business, it is crucial for the employer to purchase an employer's non-owned and hired auto insurance policies. Such policies are a must because personal auto insurance often does not cover accidents when an employee is on the clock.

Why purchase business auto insurance?

Business auto insurance is commonly purchased as a supplement to general business liability policies, and is designed to protect employers from auto accidents which can occur while employees are on the job. Although some states require drivers to have personal auto policies on their cars, many personal auto insurers will refuse to pay out claims if the employee is on duty.

Two key policies

Two of the most common business auto insurance policies are employer's non-ownership insurance and hired auto insurance. Both policies are very affordable because they are designed for occasional usage of vehicles for business, rather than supporting a full-time fleet.

Non-owned auto insurance provides liability protection when employees have to use their personal car for business matters. Common scenarios where this insurance kicks in is having employees run to the bank to deposit money or make deliveries, and even when staff are required to drive to a company meeting outside of the office.

The second major auto insurance policy designed to help protect business owners is hired auto coverage. These policies provide liability protection on cars which are hired, leased, rented or borrowed; for instance, when an employee rents a pickup truck to transport construction materials, or rents a car for business travel to a convention. The biggest difference between this policy and non-ownership insurance is that hired auto policies do not cover vehicles which are owned by employees.

How to evaluate auto insurance for businesses

When evaluating auto insurance for business, the first major consideration to keep in mind is the limits on the insurance policy to be purchased. Typically the limits on these policies are linked to the caps on your company's general liability policies, meaning that businesses which have employees who travel significantly while on the clock should ensure that the general liability is high enough to encompass the auto and property coverage for the company.

Another key consideration is whether the auto coverage meets the state minimums of the regions where employees conduct business. Ideally employers should have more than the state minimum to allow for wiggle room in case of a dire accident.

Although insurance can be a complex topic, by teaming with a reputable insurance company it is possible for any size business to help shield themselves from significant liability.

 

Visit Cadence Insurance to learn how auto insurance can help protect your business from liability.