If your business uses vehicles for work such as transporting equipment or products, you likely need commercial auto insurance. Also called business auto insurance, this coverage insures vehicles owned or used by a business, the driver who operates on their behalf, and the business itself. The coverage usually offers significantly higher coverage limits and tailored protection to these vehicles, because should a wreck occur, then a business stands to lose a lot of money from the accident.
Coverage can apply to:
The reason coverage can apply when someone uses a car privately is because, first, everyone has to have car insurance, per the laws of most states. Second, standard car insurance won’t apply to commercially-driven or commercially-owned vehicles.
However, depending on how a vehicle driven personally falls into this chain of command, a driver’s commercial auto insurance coverage might or might not apply.
As a rule, personal use should be covered under commercial auto insurance so long as the vehicle is primarily used for work. If one of your drivers stops to take lunch and someone hits the vehicle in the parking lot, the damages should still be covered.
When a business owns a vehicle, then they are the party that must buy commercial auto insurance. Both the business and the business owner will be covered under this policy. Additionally, the policy will likely cover permissive users. These are people like employee drivers who have the business owner’s consent to operate the vehicle. Therefore, when the employee drives this vehicle in their off-hours, then the business’s commercial auto insurance will continue to apply.
Just because the employee is driving off the clock, they are still driving a vehicle that represents the business. Any wreck might lead to damaging costs. Plus, the business’s commercial auto coverage is likely the only policy that applies to this vehicle, regardless of when you use it. Therefore, using this car during your off-hours will guarantee that you have all the coverage necessary to protect the vehicle.
If you are unsure about who is or isn’t covered under your business’ commercial auto insurance policy, be sure to speak with your insurance agent for clarification.