As a small business owner, operating without proper business vehicle insurance can be disastrous. Consider the case of a pizza restaurant owner who hired an employee to make deliveries using their personal car. When the employee was involved in an accident, the personal auto insurance only covered $50,000 of the medical expenses, leaving the business liable for the remaining $500,000. This devastating outcome could have been avoided with appropriate business vehicle insurance.
Business vehicle insurance is crucial for any company that uses vehicles for work-related purposes, whether it’s for deliveries, visiting clients, or running errands. Loretta Worters, spokesperson for the Insurance Information Institute, explained that a typical business auto policy covers various driving-related risks, including bodily injury, property damage, medical expenses, and legal fees.
Personal injury attorney Tina Willis emphasized that any business employing workers who drive as part of their job should have this coverage. This includes industries like construction, trucking, sales, and ridesharing services. Many states require certain coverages, but the specific requirements vary.
A common misconception is that employees’ personal auto insurance policies will cover accidents that occur while they’re on the job. Willis shared a case where a taxi company tried to rely on the driver’s personal insurance, which had a low coverage limit of $50,000. Fortunately, the company had $1 million in uninsured and underinsured motorist coverage, which helped cover the victim’s $1 million in medical bills and lost wages.
To protect your business, it’s essential to understand your insurance needs and the specifics of your policy. Shannan McMasters from Mercury Insurance highlighted potential risks, such as being underinsured in case of an accident with an uninsured driver. Jack Dowd of The Dowd Agencies recommended minimum coverage limits, including $1 million combined single limit bodily injury and property damage liability, and $100,000/$300,000 uninsured and underinsured motorist coverage.
Attorney Meloney Perry stressed the importance of carefully reviewing your policy and understanding what’s covered. It’s also crucial to vet employees who will be driving for work, as those with good driving records can help lower premiums. Loretta Worters advised having clear policies in place regarding acceptable driving behavior, such as prohibiting texting while driving.
In conclusion, business vehicle insurance is not just a necessary protection but a critical component of responsible business management. By understanding your risks and securing appropriate coverage, you can safeguard your business from potentially devastating financial losses.
