If your business uses vehicles for any purpose, insurance is a good idea. Not all states mandate insurance protection for business vehicles, but every state requires proof of financial responsibility in the form of a posted bond. It is better to obtain coverage for the majority of businesses. As much as no one enjoys paying premiums, insurance is often all that stands between your business and bankruptcy.
Getting a great deal on insurance is a time-consuming process. It is tempting to go with the lowest quote, but this is a mistake. Unfortunately, you won’t know how bad of a mistake it is until you need to file a claim. A most important decision to avoid problems later on is choosing the proper amount of coverage.
Commercial liability coverage begins at $100,000 for most national policies, but this varies by state along with the state-imposed minimums. Policies have a maximum coverage of $1 million liability. For higher amounts you will need a commercial umbrella policy. Liability is the basic requirement, and it is therefore the least expensive.
Higher liability limits than the minimum are sometimes suggested depending on the number of vehicles in your fleet and other factors, such as weight class and your ability to pay in case of excess costs. More coverage is more expensive, but the cost can be offset by a larger deductible. All insurers offer a range of deductibles to satisfy the need.
Comprehensive and Collision
Comprehensive provides protection against all damages to the vehicle caused by something other than a collision. This includes fire, theft, vandalism, and windshield damage. Collision is stacked on a comprehensive policy. It covers repairs, replacement, and legal fees associated with a collision.
If a business vehicle is financed in some way, the lender will require all of the above coverage. You still have the option of choosing a higher deductible for lower premiums, but this should be done carefully. If you can’t pay the lease on office space due to an accident and excessive deductible, the insurance policy isn’t really helpful.
Varying Coverage Applications for Different Businesses
Beyond the basic forms of auto insurance, several other additions have benefits for specific applications. None of the following are mandatory. Choosing the right amount of coverage for your commercial vehicle relies on you looking ahead to possible needs in the event of theft, injury, or other damage.
- Hired Insurance: Frequent business travelers often rent or lease autos, and this provides full protection.
- Medical Pay: Medical expenses and funeral costs for all employees and vehicle occupants are paid without regard to fault.
- Non-owned Repair: Employees using their own vehicles are protected from excessive repair costs.
- Upset & Overturn: If your business transports stored pollutants, this rider covers the cost of spills.
The dollar amounts for policies are limited by the insurer to a few choices. The right choice depends on your risk in a worst-case accident. An agent with experience in your business sector is the best guide for putting together a policy.
Benjamin Campfield writes about auto insurance options for business owners. If you are looking for reliable commercial vehicle insurance, you can find motortrade quotes here, as well as vehicle delivery insurance.
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