The majority of businesses in America are small, most of them truly so, operating as sole proprietorships or with a handful of employees. Keeping the doors open and the lights on is a big challenge; buying anything that isn’t an absolute necessity is way down on the list. So lots of small business owners drive their own cars on company business and rely on their personal car insurance. But, the few dollars saved on car insurance premiums could end up being an very expensive decision. Here’s why.
Personal Auto Insurance Doesn’t Cover Business Use
Take a minute to actually read your personal insurance policy, paying close attention to the page about exclusions. You’ll likely notice that it explicitly excludes coverage for business use -- most personal auto policies do. If you or an employee is involved in accident while driving your car for business purposes, your claim could be invalidated and you could end up paying out of pocket for physical and bodily damages. The same situation holds true if an employee uses his or her own car (and personal car insurance coverage) to run errands on behalf of your business.
Your Business Car Insurance Options
There are basically two types of business coverage options: a commercial policy and a non-owned car liability policy. If you use any kind of vehicle titled to you primarily for commercial purposes (usually 50% or more), you need a commercial auto policy, It will pay to repair or replace a vehicle damaged in an accident, as well as any third-party injury claims. If you use your personal vehicle occasionally for business purposes, or any of your employees use their vehicles to conduct your business, you may want to consider non-owned car liability. If both situations apply, then you may want both types of coverage. You can learn more about these small business commercial vehicle insurances and shop for competitive quotes here.
While, we’re on the subject, you if have employees driving for your business, insist on seeing drivers’ licenses and proof of current insurance. You could be held legally liable for your employees’ negligence.
Think your insurance company won’t know you were doing business when the occasion for the claim occurred? Lying on any insurance form or claim is fraud. At minimum, it can get your claim denied and your policy canceled. But it doesn’t end there. When you lie to an insurance company and get caught, your name goes into a large database and you may find yourself paying significantly higher premiums in the future, if you can get coverage at all.