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Common Commercial Auto Insurance Mistakes Business Owners Should Avoid

Commercial auto insurance mistakes

Common Commercial Auto Insurance Mistakes Business Owners Should Avoid

As a business owner, you have to juggle a lot of rights and responsibilities. Navigating different risks can be overwhelming at times. Commercial insurance is designed to help you protect your investment during emergencies. However, there are a few cases when business owners make questionable decisions that complicate things.

Commercial auto liability coverage is considered essential if you have employees who use vehicles to complete tasks. Unfortunately, some business owners make errors while purchasing auto liability insurance. The errors can really strain a business’s finances, especially those with a limited budget. To help protect your business from suffering long-term problems, avoid these common commercial auto insurance mistakes.

    1. Failing to Purchase Enough Liability Insurance

      Operating a car is a high-risk endeavor, and serious auto accidents could lead to lawsuits involving over a million dollars in damages. If you opt to purchase the minimum amount of auto liability coverage, you aren’t truly protecting your business. If your business is responsible for causing extensive property damage, you’re leaving your business vulnerable to covering thousands of dollars worth of damages. You should research insurance companies that provide comprehensive auto liability coverage at an affordable price. Most insurance companies allow you to customize your commercial auto insurance policy so that it aligns with your needs.

    2. Failing to Purchase a Commercial Auto Liability Policy

      One of the more common commercial auto insurance mistakes many business owners make is relying on their personal auto insurance to cover them. This mistake often applies to employees as well, as they may believe that their personal auto insurance protects them if a mistake is made on the job. Generally, personal auto insurance companies do not offer coverage to protect commercial vehicles. As you look through your personal auto insurance policy, you’ll likely find that any commercial usage of your vehicle is excluded. Purchasing commercial auto liability insurance is the only way to protect your business. Relying on personal coverage could leave you vulnerable to an expensive lawsuit if you’re held liable.

    3. Failing to Inquire About Hired/Non-Owned Coverage

      It’s recommended that you research the benefits of hired or non-owned auto coverage. Hired auto vehicles are ones that businesses lease or rent to use on a short-term basis, and many companies opt to borrow hired vehicles for 3 or 4 months. Non-owned vehicles are used to complete business-related tasks occasionally but are not owned by the business. Contact your insurance agent to see if hired or non-owned coverage is available in your commercial auto policy. Liability coverage for hired or non-owned vehicles provides flexibility.

    4. Neglecting Mobile Equipment

      Many business owners struggle to cover equipment such as forklifts and bulldozers. These types of mobile vehicles are complex because, in some cases, they’re covered under general liability coverage, and in others, they’re covered under auto liability coverage. If mobile equipment is used on the job, it’s generally covered through a basic liability policy. If you’re transporting equipment and an accident happens, the damages are not covered under general liability coverage. Auto liability coverage provides protection when you’re using mobile vehicles on the road.

Avoiding these commercial auto insurance mistakes can prevent your business from suffering long-term damage. If you have any questions, contact the team here at Remland Insurance Services, Inc., and we will assist you.


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