​A crash course on Business Auto Insurance

Make sure your business is adequately covered for different types of vehicle classifications and situations.

• Take the time to assess your auto insurance policy as well as your assets and exposures.
• Does your business own a motor vehicle? Regardless of your answer, operating a vehicle on company-related business is unquestionably one of the largest liability exposures that exist for a company organization. Over 10 million motor vehicle accidents occur each year in the United States. A statistic like that makes a comprehensive auto insurance program a critical component of your business’ overall financial protection strategy.

In most states, three distinct entities can be held liable for bodily injuries and property damage linked to an at-fault auto accident:

• The vehicle’s driver.
• The vehicle’s owner.
• Businesses on whose behalf the vehicle was being used at the time of the accident.

The types of business-related vehicle classifications include:

• Owned: Vehicles with the company name on the title.
• Non-owned: Vehicles not owned by the company but used for business purposes. They typically are owned by an employee or volunteer, but they can be owned by any unrelated third party.
• Hired: Vehicles borrowed, rented or leased specifically for business purposes.

Using Personal Vehicles for Business
Personal auto insurance is designed for vehicles not titled in the name of a business. Such policies typically provide coverage for intermittent business use but are intended for vehicles mainly used for personal use.
Let’s look at a scenario that might be a problem for a business.

• Two employees of a business decide to drive to a fast-food restaurant for lunch.
• Before they depart, the office manager requests that they pick up a few office supplies at a store adjacent to the restaurant.
• Exiting the shopping center’s parking lot, the employee, driving her own car, inadvertently hits a pedestrian in a crosswalk.
• Despite intensive medical and surgical intervention over several weeks, the pedestrian dies.
• The deceased happened to be a senior partner at a successful local law firm who had a stay-at-home husband caring for their three young children.
• Medical expenses, loss of long-term earnings, future child care and educational expenses, pain and suffering, and loss of consortium were calculated at several million dollars.
• The family’s legal representatives quickly realized that any hope for adequate financial restitution would not reside with the young driver but with her employer.

Would your business auto or commercial liability insurance policy respond to this type of claim? Are your limits high enough to cover the exposure?
Auto insurance policies are confusing, boring documents filled with legal jargon. Purchasing an online or low-cost policy without professional assistance could be a catastrophic mistake. I recommend consulting with one of our experienced insurance agents who understand the exposures associated with the delivery of business services.

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