What kind of insurance do you need?

Driving Your Business

By David Crump

Introduction

This is a primer for the small business owner that is going beyond their business location to offer services via company vehicles or need to go to job-sites with tools, supplies and equipment. Work trucks can be important business tools.

The Right Insurance for Your Company Vehicle

A personal auto policy is rated based on commuting to the office and driving for personal errands. Most auto insurers can also include limited use driving to professional appointments. Personal auto policies are not designed for general business use.

A commercial auto policy is different. It has a much broader platform designed to accommodate both the special needs of a business and different uses of a business vehicle. It can also provide the different insurance coverage needed for many business situations.

Work Truck

Work truck on the job-site.

Who’s Behind the Wheel

One way that a business auto policy can help is by letting you list key employees as drivers. This provides improved flexibility to get the job done.

Care must be taken to select and control who is behind the wheel of your company vehicles. Be sure to obtain a MVR (Motor Vehicle Record) before adding an employee to the list of allowed drivers and then re-screen MVRs at least annually. An MVR establishes that the potential driver has a valid license and lists any driving violations over the last three years. In Texas, the employee can order their MVR via the DPS (Department of Public Safety) website for a modest fee.

It is important to have a vision of who you want to drive. A driver with a history of driving problems such as a major citation (reckless or drunk driving), accidents, or a high frequency of minor violations will impact your business auto insurance rates. An unsafe driving can damage you company vehicle and make it unavailable for your work tasks and can be costly to replace. A serious accident can lead to lawsuits that go beyond your liability limits and directly imperil your business venture. A sensible driver screening system and restricting who is allowed to drive is an important way to manage your risk with business vehicles.

Driving to the Job

Job-sites can have Auto Liability requirements that only can be handled with a commercial insurance policy. The job-site owner may require a certificate of insurance with them added as an additional insured. Auto liability levels of $1 million or more are common for larger commercial construction job-sites. A “hold harmless” or “Indemnity” clause can trigger an added requirement called a waiver of subrogation. You can’t make money for your business without satisfying these job-site requirements.

A Bigger Limits needed for the Job

Bigger, heavier trucks are more common with work vehicles. Also, rather than being parked at the office most of the day, business autos are much more likely to be driven between projects. Third, a lawsuit that can erupt after an auto accident with a business owned automobile is likely to be directed at the business and the business owner. Higher severity, higher frequency and the business in peril; all three speak of the risk to your business and the benefit of buying higher limits of liability.

Equipped for the Job

The right vehicle and customized equipment can help get the job done. While a stock pickup truck or van can work for many business activities, some jobs need vehicles with expensive modification. Business auto plans can be used to protect both the underlying vehicle and the substantial added cost of custom equipment.

Summary

Don’t let your business vehicles drive you crazy! Help from a commercial insurance agent can get you going in the right direction. Managing your business vehicles including driver screening is important to your overall venture’s success.

Link to Business Auto Insurance information & quotes.