Do you own a small or medium sized business? Do you have to drive to clients for work? How much do you know about commercial auto insurance? Many people mistaken commercial auto insurance for insurance that only covers commercial trucks and buses, but that’s incorrect! It’s more than just that.

For owners of SMEs or self-employed individuals, as long as the car is used for commercial purposes such as shipping, transporting goods, cargo, passengers, employees, etc., then you will need to consider having commercial auto insurance whether that car is under your name or under the business name.

There are two reasons for this: first, commercial auto insurance can provide a much higher liability insurance premium than personal auto insurance. When a serious car accident happens and you’re at fault, higher liability limits could prevent your business from dealing with a liability lawsuit and huge financial burden. Second, if the car is considered to be used for commercial use but is insured only by a personal insurance policy, you will run into a lot of trouble with applications and claims.

If your car is only used to commute to and from home and work, then personal auto insurance is enough. However if your answer to any of the following questions is yes, then make sure to consult a professional commercial auto insurance agent as soon as possible:

  • Will employees be using this vehicle?
  • Will the vehicle be driven to other businesses to visit customers?
  • Will the vehicle be used to carry the company’s equipment and supplies?
  • Will the vehicle be used for shipping products?
  • Does the vehicle transport passengers or transport products for profit?
  • Is the vehicle equipped with equipment needed for your business (i.e., hydraulic lifts, winches, etc.)?
  • Is the vehicle owned by the business or the individual?
  • Is the vehicle heavier than an average car?

To help you understand the six differences between commercial and personal auto insurance, with a little help from Hartford, we’ve summarized the six main points to help you understand why it’s so important to insure your car!

1. Comprehensive Coverage, Higher Liability Coverage

Commercial auto insurance provides more comprehensive protection than personal auto insurance and provides liability insurance coverage for businesses. Many of KCAL’s commercial auto insurance customers raise their liability insurance to $1 million. Since larger trucks are more likely to get into or cause serious accidents, the more security you have, the better.

2. Customized Protection

Commercial auto insurance provides customized protection based on your needs and usage, including trucks, trailers, business autos, and more.

3. Insuring Employees

Commercial auto insurance policies cover employees who drive company insured vehicles. Some policies cover employees’ personal vehicles when they’re used for company business as well. Policies vary so make sure to consult with your insurance agent.

4. Corporate Tax Credit

The premium you pay for commercial auto insurance can be included in the company’s expenses and will qualify for tax deduction when filing your taxes.

5. Protection from Lawsuits

If you or your employees get into an accident, are at fault, and causes any personal and bodily injuries, your company could get sued! Commercial auto insurance typically provides higher policy limits. It protects your business assets from lawsuits and other liabilities.

6. Legal Requirements

Some states require companies to purchase commercial auto insurance if you have certain types of vehicles. Since some vehicles are driven out of state, you need to keep in mind that if the destination you are going to requires commercial auto insurance for certain vehicles as a part of that state’s law, then your company must purchase it.

KCAL Insurance Agency has served over 5,000 businesses with their insurance needs. We also carry many A-rated insurance companies. Contact KCAL now and get a free quote for commercial auto insurance!