5 reasons your company vehicle needs to be insured

August 18, 2022

Reasons why your company car should be insured

Insuring that your company is protected from any kind of adversity that might show up is one of the key elements to running a successful business. Understanding the importance of having various insurance options, like life insurance for employees, business insurance, property insurance, etc. can help your business withstand any unfortunate emergency.

One key type of insurance that you need to be aware of is vehicle insurance! It’s meant to protect your business from the high costs of accidents, covering costs for both the vehicle and the driver. This includes all kinds of company vehicles such as commercial trucks, company cars, heavy-duty trucks, forklifts, etc.

In this blog post, we will explore the reasons you need people need business insurance for their own car. We will also look at the risks involved with owning a business vehicle and the coverages you need to protect your business.

Why you need commercial auto insurance

Regardless of the industry, you’re in, or how big your employee size is, commercial auto insurance will help you stay strong and secure during a crisis. 

Especially when you’re a small business owner who doesn’t want to stress out about dealing with unexpected expenses immediately after getting into an accident with another vehicle or other pedestrians nearby. These types of incidents could put a serious dent into profits if left unaddressed until later.

Here are five reasons why you need to get your company vehicle insured.

Protects your business from the high costs of accidents

Accidents happenthat’s just a fact of life. But when they occur in the course of business, they can be extremely costly. 

Commercial auto insurance protects your business from the high costs associated with accidents. It also covers any damages you may cause to other people or property while using your car for business.

Please be aware that commercial auto insurance is different from personal auto insurance. Personal auto insurance policies typically have lower limits and do not cover business-related activities. However, if your employees use their personal vehicles for business purposes, you can avail of business car insurance to protect them.

Pays to repair or replace your fleet vehicles if damaged or stolen

Other than accidents, there are many scenarios that might get heavy on your pockets. You may wish to replace an expensive piece of equipment with a newer model if it isn’t functioning properly. There may have been damages, such as broken doors, smashed windows, or damaged ignition locks on the vehicle, that you wish to repair as soon as possible. 

Or you might need to cover expenses for a car that was parked inside your business’s parking lot at night, and someone broke into it, stole parts, or worse, swept away the vehicle from the premises. 

Luckily, most commercial auto insurances cover the cost incurred by such damages or theft! Just make sure to check that your policy covers theft and damage besides accidents.

Offers liability protection

Liability insurance is a must for any company vehicle. It’s when you or your employee accidentally happen to damage property or cause an injury to someone while driving the company vehicle. Often, the victims of such accidents may file lawsuits, which can incur huge losses and stain a company’s reputation. 

Having commercial auto insurance protects your business from lawsuits and can include coverage for bodily injury or property damage claims, as well as legal fees. 

The liability coverage you purchase depends on how much you want to spend on protecting yourself against potential legal costs—the higher the amount of coverage purchased, the more expensive it will be per month. If possible, try to purchase this type of protection on a per-vehicle basis rather than an annual basis—since this means less paperwork.

Helps you adhere to the state or national laws

Having commercial auto insurance is not just a matter of personal preference anymore! Many states have laws that require you to have liability insurance when operating your company vehicle. So it’s important to ensure you’re covered before registering your vehicle with the state or local authorities.

In some states, the requirement is only for certain types of vehicles, drivers, or driver’s licenses. For example, in New York, driving without insurance can have serious consequences. A person could get arrested, fined, or have their license suspended for not following the law. Moreover, if a person without insurance is caught in an accident, their license and vehicle registration would be suspended for over a year, along with a fine of up to $1500!

Also, companies have different requirements for insurance coverage, depending on whether they own more than one car at once. So if you’re starting a new business with three people working together, you’ll need different coverage levels than if only two people were working together.

It is good for your business reputation

Lawsuits and hefty fines can have a massive impact on a business! This could mean defamation and customer loss. On the other hand, businesses with a clean slate, i.e., commercial auto insurance, are more likely to attract customers and retain the ones they already have. 

Keep in mind that insurance companies are interested in growing their businesses too, so they may be more inclined to offer you discounts or other incentives if your company has commercial auto insurance coverage. They also want to help you find new customers who will have an interest in what your company offers and benefit mutually. 

Make sure you know and understand specific driving laws—such as whether or not an employee should be able to drive their vehicle on company time (usually after hours). 

Also, many companies choose insurance not only for themselves but also for their employees. This is because having this kind of coverage helps ensure things run smoothly at all times without any issues arising later down the road when everyone needs access to transportation at once!

How to choose the right commercial auto insurance

To know what kind of commercial auto insurance coverage you need for your business, you first have to consider your business’s needs. The amount of coverage you need depends on the type of business you run and the vehicles you own. 

For example, suppose your company owns a fleet of trucks that are used for hauling freight or delivering goods from one place to another. In that case, it’s common practice for companies like this to purchase extra insurance coverage for those vehicles. This way, if an accident involves one particular truck in the fleet—even though this may be rare—it won’t ruin all their other trucks’ value too much (or at least not enough).

Other factors that influence the total cost of your coverage are:

  • Previous driving records of the driver
  • The size, weight, and type of items being transported
  • The type of vehicle and the purpose it’s used for
  • The value of the vehicle

These are the factors an insurance company considers while examining a business’s potential for risk to determine its overall insurance cost!

Take that first step towards protecting your assets, and learn more about commercial auto insurance today. You’ll understand everything commercial auto insurance covers and what kind you actually need. This will surely help you make an informed decision about the coverage to choose for your business!

Auto insurance is less expensive than you think!

When you’re considering having your car insured, it’s important to know that the insurance cost is not as high as you think. You can try several things to lower your premiums’ cost and ensure you get the best deal.

  • Consider how many employees work at each location
  • Estimate how many miles per day/week/month are driven by each person
  • Get a quote from multiple companies
  • If one company doesn’t have what you need, try another one

If the insurance rates go up or down (which happens often), there will still be options available to meet your budget needs during those times when rates change drastically. 

You know you’ve bagged the right policy when it’s covering the cost of injuries, medical coverage, property damage, towing costs, and other damages you could possibly think of!

Conclusion

Insured company vehicles are a business owner’s best bet, allowing them to secure their assets and save their hard-earned money in difficult situations. In fact, investing in the right protection for your commercial vehicles is as important as investing in the vehicles and your business.

You must get a commercial auto insurance policy for every vehicle you use for business purposes, even a 2-door sedan, irrespective of whether you’re just traveling to and from the job site.

More must-read stories from Enterprise League:

Related Articles