It's clear that you're going to need commercial auto insurance for a delivery van, for a taxi-cab, for a transport vehicle. But what about a company car that you also drive for personal use? What about a car that you've owned for years and have only recently started using for work? What if you never use your car for deliveries or pick-ups, but you do use it to make end-of-day bank trips? Where do we draw the line between covering your car with personal auto insurance vs. commercial? Here's what you need to know:
Here's some good news: If you drive a company-owned car, it will be covered under the company's commercial auto policy. For this reason, many small business owners choose to put their personal vehicle in the company's name and cover it under a commercial plan. This way you are covered under the higher liability limits of your commercial plan, and you don't have to worry about any complications that arise from using a personal car for business purposes.
Using Your Personal Car For Business
You can use your personal auto for business purposes, but if you're making deliveries and taking long business trips, you'll want to either get on a commercial auto policy, or talk to your agent about raising your liability limits. If you are found to be at-fault in an accident, and your business can be held liable, then that's what the other party is likely to target should it come to a lawsuit.
Legally speaking, the only cars that you are actually required to cover under commercial policies are under ownership of your business, that have commercial plates, and are registered for commercial use. Commercial auto insurance may not be legally necessary for the car that you use for business purposes, but in many cases it simply makes more sense to get your car covered by a commercial policy so that you can enjoy higher liability limits.
As a general rule of thumb: When it comes to business, whether it's for your car, your property or business liability, you want as much liability protection as you can get. It takes years to build a successful business, but, without adequate insurance, it may be toppled in minutes by a single lawsuit.