Understanding the best auto coverage for your business is essential to ensure you are covered for any contingencies. If your company delivers products or people, please make sure that you update your policy as your business grows. Here are the answers to some of your frequently asked questions concerning commercial auto and fleet insurance to help you understand which coverage type is best for your business.
What is commercial fleet insurance?
Commercial fleet insurance is for companies with multiple vehicles. It is similar to standard insurance but applies to many vehicles. Policies can be used for small and large fleets.
Can you drive your vehicle for business purposes?
You can use your vehicle as transportation to get to and from work or a meeting. If any aspect of your job requires you to use a vehicle to complete tasks in your job description (i.e., deliveries, client visits), then you wouldn’t typically be covered by a basic personal car insurance policy if there were an accident. However, it is worth noting that only a fraction of the individual vehicle’s coverage would be covered. It would only cover the percentage of you using that vehicle for tasks directly related to your business.
Is commercial insurance cheaper than personal auto for my business?
Commercial auto insurance is not cheaper than personal auto insurance. Commercial auto coverage is typically more expensive because you risk higher liability and property damage claims when transporting people or goods for money.
What types of commercial auto insurance are available?
There are three basic types of commercial policies available, each designed to suit your business size and needs:
- Business use: For small businesses, home-run businesses, or individual entrepreneurs. Used for driving to various locations and meeting with clients. You can add “business use” to your auto insurance policy.
- Business use for multiple drivers: This allows adding numerous drivers to your policy. Various employees can utilize your vehicle, and the owner pays the insurance.
- Commercial auto use only: Vehicles used exclusively for work purposes. Daily use with added equipment and features to a vehicle (i.e., tool bed in the truck).
Can anyone drive business vehicles with a fleet insurance policy?
Most fleet policies are usually arranged on an “Any authorized driver” basis, meaning anyone can drive with the permission of the company/directors under the fleet insurance policy.
Does fleet insurance cover any driver?
Can I get fleet insurance for my family?
No. All three parts of the definition of a fleet must be satisfied for a fleet exemption. For example, the fleet exemption would not apply to a contract insuring a group of vehicles driven primarily for personal use, simply because they were insured under common ownership and are used for business purposes. Overall, individual or family cars, even if used for business, typically do not meet the qualifications to be covered for fleet insurance.
What is the difference between “any” and “named” driver policies?
Generally speaking, ‘Any driver’ policies have higher premiums, but offer the most flexibility and can be better for larger companies that may otherwise struggle to track and enforce specific vehicle usage. However, having young or convicted drivers on an ‘Any Driver’ policy can substantially raise the premium costs as you spread the driver’s risk across all vehicles.
As a result, some insurers allow you to have ‘Any Driver’ policies with named drivers. For example, this would allow you to insure most drivers for all vehicles, and only the higher-risk drivers (young/convicted drivers) would be named to specific vehicles. This can help reduce premiums but still maintain the efficiency of an ‘Any Driver’ policy.
Choosing a ‘Named driver’ policy may make more sense for a smaller-sized company, and simply assigning drivers to vehicles. This is usually the most affordable option.
Does commercial insurance cover personal use?
Simply put, no. Many owners, especially those with home-based businesses, use their vehicles for individual and commerce purposes. This is, of course, fine to do. However, if you do this, you require a commercial auto policy that ensures protection when you drive for work. Without it, you could have your insurance claim denied. Your auto insurance will kick in if an accident occurs while running personal errands. You need both types of insurance to ensure that you have adequate coverage.
Who would be covered under commercial auto and fleet insurance policies?
The owner and employees typically have coverage, so please look at your policy to verify who has protection (you can always add new drivers later).
How are commercial auto and fleet insurance rates determined?
Several factors can impact your insurance rate, and you can keep your premium low by not having many claims on your record, employing experienced drivers, and encouraging good driving habits through training courses. Some factors that are used to determine your rate are:
- Number of vehicles
- Vehicle type
- Experience of drivers who your policy will cover
- How the cars are stored at night
- Alarm systems in the vehicles
Do I need commercial vehicle insurance to take a client out in my car?
You should have this type of policy if you transport clients or perform other commerce activities using your vehicle, due to greater potential liability issues. If you get into an accident, the potential for litigation would fall on you and your assets (not your business) if you don’t have commercial insurance.
What sort of insurance should a small business owner have to ensure proper coverage?
Commercial auto insurance is designed to fit the needs of your business, and it’s essential to understand what is and isn’t included in your policy. To ensure you’re not leaving yourself vulnerable to risk and potential loss, here are some essential coverage components for small business owners:
- Injury to you, your employed drivers, or passengers, including medical expenses and lost wages
- Loading and unloading liability for when you’re transporting products to customers or events
- Replacement car coverage for when your commercial vehicle is being repaired, so you don’t miss out on work
Additional coverage can often be purchased if you operate your commercial vehicle in other provinces or states. This coverage would ensure you and your employees are covered during those trips. Ask one of our isure representatives for more information.
Does the type of vehicle used affect the cost of coverage?
Like personal insurance policies, the type of vehicle you drive will impact the kind of coverage you need. Bigger, heavier commercial vehicles often cause more damage if they’re involved in an accident; your coverage should reflect that. You should have commercial auto insurance coverage if you use any vehicle specifically designed for construction or maintenance purposes. If you own a business that utilizes cars, large trucks, or vans as part of your business plan, they can be put under the same fleet policy. It is not restricted to one type of vehicle, as long as it is only used for business purposes.
What is the difference between fleet and non-fleet?
What differentiates a fleet vehicle from a commercial non-fleet vehicle is the number of commercial vehicles your business owns. Usually, if your company owns five or more commercial vehicles, this is considered a fleet.
What is the difference between commercial vehicles and fleet vehicles?
Commercial vehicles are designed to transport goods or large groups of passengers. For commercial vehicles to be considered fleet vehicles, they must meet specific criteria. The vehicle must be owned by an organization, business, or agency rather than privately owned. There are no size requirements for a fleet vehicle. The only requirement is that they must be owned by a business rather than an individual.
To properly gauge what coverage is right for you, keep in touch with our isure brokers to update your policy. We can always help answer any questions you may have regarding commercial auto and fleet insurance as they relate to your business.
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