Why You May Need Commercial Vehicle Insurance: Even with a Home Business, Personal Coverage Might Not Apply.
What Coverage is Needed if My Employees Use Their Company Car for Personal Business?
First; What is Business Vehicle Insurance, and How Could it Apply to Your Situation?
A business needs to be covered by the same basic types of commercial vehicle insurance coverage for cars, trucks or other vehicles used in the business, as would be in place for vehicles in personal use for travel or day to day activities.
A Business Owner Policy (BOP) does not, in and of itself, provide any coverages for vehicles, there must be a separate policy for business vehicle insurance coverage, including liability, property damage and personal injury of the driver, passengers and any involved in an incident.
Florida requires a business to purchase liability insurance policy for bodily injury and property damage that may result from a vehicle accident occurring while you or someone from your organization is driving on business for the company. Florida also requires uninsured/underinsured motorists’ coverage and / or medical payments coverage (known as Personal Injury Protection (PIP) in Florida). A business may also choose to secure physical damage coverage for the vehicles the business owns, leases or hires, however this is not a Florida State requirement (this is all part of a commercial vehicle insurance policy).
Many self-employed individuals, from the one-woman catering powerhouse to the hammer-toting contractor, believe that their personal car insurance policy covers them for work uses. But when it comes time to file a claim, that belief might not stand up to scrutiny.
To Answer the Question: Does a Business Need Commercial Vehicle Insurance, or do I, as a Self-Employed Home Businessperson Need Commercial Vehicle Insurance? We have prepared the following Questions:
If you can answer “yes” to any of the following questions, you may need Commercial Vehicle Insurance:
- Are any of your vehicles used for pickup or delivery of goods, including supplies, materials, newspaper, pizza, other food items, or for messenger services?
- Are any of your vehicles used for limousine, taxi service, or other livery service?
- Are any of your vehicles owned or leased by a partnership or corporation?
- Are any of your vehicles registered or titled to a business, corporation, partnership, or DBA (Doing Business As)?
- Do any employees or non-listed drivers drive any of your vehicles on a regular or occasional basis?
- Are any of your vehicles leased or rented to others?
- Are any of your vehicles a pickup, van, or utility vehicle with a gross weight exceeding 10,000 pounds, or do any of your vehicles have a rated load capacity over 2,000 pounds?
- Are any of your vehicles equipped with snowplowing equipment, cooking or catering equipment, bathrooms, altered suspensions, hydraulic lifts, or racing equipment?
- Do any of your vehicles have equipment installed such as ladder racks or permanent toolboxes that are used to support a business?
Why Would Personal Vehicle Coverage Not Apply when You Need that Coverage the Most?
Even if you use your Ford F250 or Hyundai Sonata for personal uses like supermarket runs, road trips, or nights on the town, as far as car insurance companies are concerned, it may be a commercial vehicle if you also use it for work purposes other than commuting.
Car insurance companies consider commercial vehicle insurance and personal car insurance to be 2 very different types of policies due to the differences in liability and risk. Personal policies are written with the average private citizen and their needs in mind, while commercial policies are designed to address the unique needs and situations that arise in commercial use.
If you file a claim on your personal car insurance for a vehicle you use for work, your insurance company may deny your claim simply because some business uses violate the terms of your personal car insurance policy.
Why Would a Seemingly Legitimate Claim be Denied for Good Reason?
Imagine a pizza delivery guy, the driver (and owner) of a one-woman shuttle company, and an independent landscaping contractor standing on the side of the road, staring at their 3-car pileup. One by one, they pull out their phones to call their car insurance companies. In sequence their claims reps ask them to detail the accident and, upon hearing the answer, each rep murmurs, “Sorry, your personal car insurance won’t cover this.”
What is the Justification of this denial?
- The pizza deliverer’s claim is denied because he transports commercial goods
- The shuttle driver’s because she transports people as part of her business
- The landscaper’s because his truck features ladder racks and permanent toolboxes he uses for work
Therefore, depending on the nature of the business and the specifics of the car insurance company’s policies, a small home-based company may well need to buy Commercial Vehicle Insurance, or find themselves denied coverage when they need it the most.
We here at Riles and Allen know that when you’re self-employed or a small-business owner, it is hard to understand the distinction between commercial use and personal use when you are just trying to get from day today. Give us a call and let’s talk about your needs, we will find the most cost-effective way to keep you on track and adherent to Florida insurance law. You want to be covered, should the worst happen, and frankly you need to find out today if you need to change your coverage.
Determining if you’re a good fit for Commercial Vehicle Insurance can be a complex decision. Thankfully, Riles and Allen can help you decide what car insurance coverage you need, whether those policies are personal or commercial and just what level of insurance is right for you. It is also important to us to find you the most cost effective solution for your situation, as a general agent, we can shop many policies and get you the price and coverage that will fit you best and help your business grow securely and confident that you are covered should the worst arise. Don’t lose your business over the semantics of Insurance Policy wording, call the experts, or better yet come in, sit down with a real person and get to know us, Riles and Allen agency, serving all your Personal Insurance and Commercial Vehicle Insurance needs!
