Do you own the company and a car? If so, ask your insurance broker about whether your personal car insurance provides enough coverage. If you occasionally use the car for business purposes, you should be fine. Where it's available, however, look into getting the type that specifically covers driving for occasional business purposes. That way, you don't take the risk of potentially being denied coverage in the event of an accident. If you do get this "business class" coverage, expect to pay about 10 percent more than what you would for strictly personal car insurance.
When personal insurance falls short, commercial auto insurance is your only other option. Your rates will typically double because limits tend to be higher. But if your driving record is less than perfect, commercial auto insurance might actually help lower rates since the car is named on the policy, not any specific individual. Keep in mind that the car needs to be owned by the business in order to qualify.
Given the cost difference, you may be tempted to downplay how much you actually use your car so you can qualify for personal coverage. If you do so, though, you might have a claim denied if your occasional business use is discovered to be more than that. It is safer to candidly discuss your driving patterns with your insurance broker, who can work to find a carrier with the most favorable interpretation of that term.
If you have employees who occasionally drive for business purposes, you should definitely obtain non-owned and hired coverage. This protects the company should an accident occur while using a personal or rental car for business. You can obtain about a million dollars in coverage for about $200 a year. Note, though, that it does not cover the driver's liability or any damage done to the car - that would be handled by the driver's personal car insurance. Employees should check their personal policies to make sure their use of the car for business will be covered.
When employees are on the road most of the time, it makes sense to provide vehicles for them and obtain commercial auto insurance. It can be costly, but there are some steps you can take to manage the costs. They include making sure prospective employees have a good driving record before they are hired, setting up incentives to have a safe driving record without tickets or accidents, and establishing specific rules that prohibit the use of cell phones and other electronic devices while driving.
The chance of you or your employees getting into an accident is no doubt greater behind the wheel than at your desk. Steer clear of trouble by making sure you have the right coverage.
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