How to Shop for Commercial Auto Coverage

Obtaining commercial auto insurance coverage can be confusing.

Following are some ways to take the sting out of shopping for insurance:

1. Take Inventory: Take time to evaluate current coverage options and needs. Make a list of all automobiles and vehicles used in the course of your business, including personal use of company cars and business use of private vehicles. In general, it is better to be safe than sorry when allowing the personal use of a company car or the business use of a private vehicle. When in doubt, buy commercial coverage. Keep track of:

• Make and model of all vehicles and percentage of time used for business purposes.
• Type of business, name of business, industry and clients served.
• Ownership of each vehicle.
• Driver of each vehicle.
• Primary business use of each vehicle and location.

2. Evaluate Options: There are several coverage options available when selecting commercial auto coverage. For example, you need to think about fleet insurance versus individual auto policies. In general, fleet insurance tends to be more cost effective for larger needs, but it often depends on the total number of vehicles, usage patterns and other criteria.

3. Ask About Discounts: Commercial auto coverage can be reduced via careful planning and preparation. Call my office about discounts for any of the following which may apply:

• Safe drivers.
• Type of vehicle.
• Higher deductibles.
• Anti-theft and other safety devices.
• Location of business operations, parking and off-site storage.
• Number of prior claims.
• Coverage limits and exclusions.

4. Consider the Name: Deciding how to list the insured driver isn’t quite as simple as it may sound when working with a commercial policy. Depending on the type of business, ownership of the vehicle and even status of the driver, the insured party needs to be specified in the policy. Be sure to speak with my office to assure the name of the insured is properly recorded when purchasing or amending a policy.

5. Liability Limits: Commercial auto coverage typically includes higher liability limits. For example, even $1 million or more might not be sufficient, especially if your business deals with transportation of vulnerable populations, hazardous materials or expensive items. Ask me about liability limits and other special considerations.

6. Additional Options: Many small business owners find it helpful to purchase additional layers of protection when buying a commercial auto policy.

7. Equipment and Addendums: Do not make the mistake of assuming that all equipment is included in the standard commercial policy. Specialized vehicles that hold equipment, generators or other attached machinery may require additional coverage addendums.