Reports from the Bureau of Labor Statistics reveal that over 20% of small businesses in the U.S. fail within the first year of operation. Are you a savvy business owner intent on beating the odds and maintaining a steady growth trajectory? If yes, you know that reinvestment is integral to ensuring business growth and success. Without enough money to cover various risks out of pocket to cushion your business from incurring damage or losses, how about starting small?
Begin by ensuring your business automotives are insured and well maintained. Commercial vehicles enable your business to make deliveries, transport cargo, ferry employees to different locations, and facilitate other important duties. Therefore, insuring and caring for your business vehicles is a seemingly small task that can save your business unimaginable loss and inconvenience. Read on for more tips for insuring and taking care of business automotives.
What Business Automotive Insurance is and Why It’s Important
Formerly known as commercial auto insurance, business automotive insurance is designed to cushion business vehicles against various risks. The insurance policy is, thus, a contract where you, the business owner, agree with the insurance company to pay a certain premium every year and receive compensation for losses and damages in exchange. Commercial auto insurance only covers financial losses accrued when the insured business vehicle is involved in an accident or other risk, as detailed in the policy document.
Note that if you or your employees get into an accident while driving the business vehicle, you can’t look towards personal insurance to pay the claim. If you’re not clear about whether your business needs commercial auto insurance, below is a list of situations that indicate you do.
- The truck or van used for various transportation needs is part of your company’s property
- The vehicle is only used for business and not for personal reasons
- You offer various services and hire out your car to people looking for cross country movers
- The business vehicle is used to haul equipment or tools
- The business vehicle is used to ferry goods or people for work purposes
- Some of your employees operate the business vehicle
Commercial auto insurance is important because it rids you of the liability of incurring costs if a business vehicle is involved in an accident. Commercial auto insurance covers all work vehicles as detailed on the policy document and pays claims for property damage and injuries if you or an employee suffers an accident while driving the work vehicle. The types of business automotives covered by commercial auto insurance include:
- Commercial trucks or vans
- Tow trucks
- Box trucks
- Company cars
- Food trucks
- School buses
- Golf carts
- Taxi cabs
Commercial auto insurance can replace or repair your work vehicle if you have the appropriate additional cover.
Additional Business Automotive Insurance Covers You Should Consider
Business owners may seek extra coverage for business automotives to avoid servicing two separate policies. Common additional business auto insurance covers include:
Rental car reimbursement insurance: When you own a car hire/rental business, you’re never sure if the car hired out will come back in the same superb condition it was before. This additional cover ensures you are reimbursed for all issues and damages a rental car develops after hire.
Guaranteed Asset Protection (GAP Insurance): According to the Insurance Journal, over a million cars are reported stolen in the U.S. annually. If your company car is stolen or wrecked in an accident, Gap insurance helps cushion you against financial losses you may suffer if you have to repay more in loans than the depreciated value of the said vehicle.
Roadside assistance insurance: If the insured company car becomes immobile owing to a dead battery or a flat tire, this add-on insurance covers the fees for roadside services like towing and jumpstarting the car.
New vehicle replacement insurance: Should your company car get totaled in an accident, this type of insurance helps acquire a new vehicle in the same price range and category.
Why You Need Commercial Automotive Insurance
As a company that owns a fleet of business automotives, it’s risky to go about your daily activities using vehicles that aren’t insured. Commercial auto insurance absolves you of the responsibility of paying for damage or injuries involving company cars. Without insurance, you may need a car accident attorney because it’s illegal for any vehicle to operate on public roads without insurance. Moreover, you need an attorney to maneuver the intricate prosecution process when facing a lawsuit.
In isolated cases, commercial automotive insurance helps pay for expenses incurred during potential lawsuits should other vehicle or property owners press charges. Commercial insurance offers comprehensive coverage which pays for the replacement or repair of company vehicles in the event of vandalism, theft, fires, floods, bad weather, or accidents. Other risks that commercial auto insurance covers include:
- Bodily injury liability cover
The claim aims to pay for injuries on covered employees involved in an accident with the business vehicle. This cover can also cover legal costs if you face lawsuits regarding the incident.
- Personal injury protection
Insurance covers medical expenses and related costs like loss of wages if the driver or passengers inside the company vehicle are injured or can’t work after an accident.
- Medical payments cover
Insurance pays for medical expenses or funeral costs if the driver or passengers in the company vehicle are involved in an accident and are injured or die.
- Uninsured motorist cover
Business automotives insurance here pays for injuries to the driver or passengers aboard the company car should they get involved in an accident where the other driver is uninsured.
- Combined single limit cover:
CSL cover aims to settle damages for property damage claims or bodily injury beyond the original policy’s initial limit.
- Collision Insurance
Commercial auto insurance aims to finance repairs or replace a company car that’s been in an accident.
- Underinsured motorist coverage
Insurance helps facilitate and pay for medical expenses if another driver hits you when they don’t have enough liability coverage.
- Property damage liability insurance
Should there be an accident involving the company vehicle and another person’s property, insurance helps pay for property damage and legal costs if you’re sued.
Business automotive insurance is similar to personal insurance. However, the two differ regarding who is covered and how much the limit is on the policy. In commercial automotive insurance, business automotive enjoy a significantly higher limit. Also, commercial auto insurance only covers licensed employees and employees who regularly operate the insured vehicle.
Top Tips for Purchasing Commercial Auto Insurance
If you’re looking for the right business automotives insurance cover that fits your company, below is a checklist to point you in the right direction on your quest to purchase the right insurance cover.
Talk to an expert: Consider consulting extensively with an insurance agent well-versed in commercial auto insurance. An agent can help illuminate the different pros and cons of each auto insurance service and helps you narrow down to the right insurance package fit for your needs.
Get enough coverage: The number one culprit behind why most businesses end up chipping back into their pockets even when they have insurance is because they are underinsured. Ensure you consider all things and have enough insurance coverage to protect against injuries, repairs, replacements, or lawsuits in the event of an accident or damages.
Do your due diligence on the service provider: Insurance companies offer lucrative deals to businesses looking for commercial auto insurance covers. Still, not all are as forthcoming when it’s time to pay claims. Avoid inconvenience by partnering with a reputable insurance provider whose covers are reasonably priced and famous for their integrity regarding claim payments.
Consider appropriate additional coverages: On its own, a commercial automotive policy may not be sufficient for all your needs. Consider including add-ons like roadside assistance reimbursement to compensate for the difference if the original policy falls short.
Business Automotives Care and Maintenance Tips
A vehicle that your employees use regularly to carry out business errands must always be in tip-top shape. Business automotives carry heavy loads and can sometimes be overused. However, appropriate care and maintenance is crucial to avoid accidents and breakdowns.
Servicing your company vehicles saves you valuable time and money. Therefore, ensure your drivers routinely inspect the vehicle and alert you when something seems wrong or when the service appointment is due. Below are useful tips on the care and maintenance of business automotives.
1. Maintain A Vehicle Checklist
A checklist works as a point of reference for your drivers when they need to inspect the vehicle’s condition daily. Ensure that your drivers check for irregularities as provided on the checklist and submit the report to the supervisor or manager daily before leaving. A good checklist reminds the driver to check the air filter, tire pressure, air conditioning, brakes, oil level, batteries, hoses, etc. Should they notice irregularities, they must detail the same on the report so your manager can promptly arrange professional repairs. It’s prudent to have an in-house mechanic on standby to help with the inspections and attend to small mechanical issues before the drivers have to use the vehicles.
2. Regularly Service Company Vehicles
Understandably, business always comes first. However, if the condition of the company vehicles threatens to stall any business tasks, you risk making losses or damages. Regularly serviced vehicles are less likely to break down spontaneously. If your cars travel long distances or carry heavy loads, partner with a reputable auto services expert to ensure the smooth running of your business.
During servicing, you could consider subtle upgrades like getting new seats from the custom golf cart seat store if you own a golf club or purchase a truck topper to enhance privacy and safety for the contents transported on your diesel vehicle.
3. Arrange for Expert Tire Care and Maintenance
Business automotives that cover long distances have tires that show more tear and wear after a rather short window of time. Therefore, you must arrange for expert care and maintenance for tires before or after your fleet returns from different locations. According to the National Highway Traffic Safety Administration (NHTSA), over 19,000 people incur injuries owing to tire-related car crashes annually. The report further details that over 700 fatalities are reported due to tire-burst accidents yearly. Therefore, it is crucial to understand the importance of regular tire care and maintenance.
To kill two birds with one stone, seek car suspension services and electrical system maintenance, alongside tire maintenance, and promptly replace worn tires.
4. Keep Your Car Well Sheltered
A garage or a shade for business automotives yet to be dispatched ensures the vehicles are safe from external factors and stay in good shape. Visit your local paint protection shop to explore solutions to keep your vehicle’s exteriors well-maintained and free of irregularities like scratches and dents. Vehicles that aren’t well-sheltered need polishing or a new paint job more often. Considering the high cost of car painting services, a shade is a far better and cheaper alternative.
5. Keep Company Cars Clean
Despite how busy your drivers are, remind them that it’s their responsibility to keep their vehicles clean. Cleaning the company car is an excellent way to keep the driver productive and prolong the vehicle’s health. It is inappropriate to leave debris like food droppings and snack wrappers scattered all inside the company vehicle whether or not it’s in use. The driver should keep the branded company car clean inside and outside to represent the company appropriately. Ensure the drivers have access to cleaning supplies and sprays to encourage them to clean the vehicles after the day ends.
6. Train Your Drivers
You are confident you hired experienced drivers but also cannot undermine the importance of routine safety training. Drivers must undergo routine training on proper vehicle maintenance and safe driving practices. Carry out drills to ensure the drivers know how to execute simple maintenance and confidently respond to emergencies. Proper basic training ensures your drivers are less likely to cause or be involved in accidents.
Tips for Insuring and Taking Care of Business Automotives: Bottom Line
Commercial auto insurance, car care, and maintenance go hand in hand. When business automotives are appropriately cared for and insured, you enjoy peace of mind that you have all your bases covered and your business can run smoothly. Above is all you should know to avoid putting your business at risk by choosing the wrong commercial auto insurance package or failing to care for and maintain your fleet of company vehicles properly.