For a lot of small companies, “work” is wherever the job is. Which, obviously, requires travel – frequently, by vehicle. Whether both you and your employees drive your personal vehicles, your company has company cars, or else you rent a vehicle to obtain around, knowing what sort of commercial auto insurance you have to safeguard your company could be tricky.
Additionally to non-public vehicle insurance and rental vehicle insurance offered by accommodations vehicle agency, there’s two other kinds of car insurance you must know about: hired auto and non-owned auto coverages. Both could be added as endorsements in your general insurance policy.
Hired Auto Insurance Policy
Whenever you, the business, or your employees comes with an accident inside a rental vehicle, three different insurance plans could possibly come up. First, the driver’s own auto liability still applies, just like if they were driving her very own vehicle. So, should there be any sort of accident, the worker is personally responsible for injuries or damage to property with other parties.
The motive force might also have hired vehicle physical damage coverage within his or her very own personal auto insurance plan, which may cover any physical harm to accommodations vehicle. Be cautious, though, as some “comprehensive” and many “limited” personal auto insurance plans don’t include hired vehicle coverage.
Second, there is the rental vehicle agency’s physical damage coverage and liability that you’re offered during the time of rental.
And third, there’s hired automobile coverage – yet another coverage that either supplements or replaces a vehicle rental agency’s liability, by protecting your organization in case of a suit caused by any sort of accident.
Because hired auto insurance only covers liability for your company – not physical damage – it certainly is smart to make sure the motive force has hired vehicle physical damage coverage within his or her very own policy, in order to buy the rental agency’s physical damage coverage if you or perhaps an worker rents a vehicle.
Non-Owned Auto Insurance Policy
If both you and your employees typically drive for business purposes using personal vehicles, you will want to learn about non-owned auto coverage. A renters insurance policy protects your organization against lawsuits that could arise when your employees comes with an auto accident while driving an individual vehicle on company business.
Just like hired auto coverage, the driver’s personal insurance still applies when the driver themself is sued, and also the driver’s personal auto damage to property insurance should cover any physical damage caused by any sort of accident. What non-owned auto coverage does is safeguard your company when the other party active in the accident decides to file a lawsuit your organization.
Will I Require It?
To safeguard themselves against any liability caused by an auto accident brought on by the or your employees while focusing on a customer project, some clients may need your company to hold auto liability. Typically, such coverage is needed in contracts with language for example: “Contractor shall carry bodily injuries, damage to property, and automobile contractual liability for owned, hired and non-owned autos having a combined single limit of liability for every accident of not under $1,000,000.”
But in case your clients do not require it, hired and non-owned auto coverage can be a smart investment. If the worker of the company comes with an auto accident in their own individual vehicle or perhaps in a rented vehicle during company business, as well as their personal insurance coverage is insufficient to pay for the claim, your organization could be held accountable for that excess amount. Not to mention, almost always there is the danger that the company itself is going to be sued.
While the price of these kinds of claims can be quite high, the price of protecting your company against all of them with hired and/or non-owned auto insurance coverage is really low – usually under $150 each year.