In the intricate world of business, where success often hinges on strategic decisions, one key aspect often takes the backseat until it becomes absolutely crucial – commercial auto insurance coverage. As businesses accelerate towards success, the importance of choosing the right protection for the vehicles that drive operations cannot be overstated. Our exploration into “Driving Success: Choosing the Right Commercial Auto Insurance Coverage” has been a journey through the essential considerations that pave the way for a secure and prosperous road ahead.
How to hire the right driver
While business owners will want to make sure they have the right drivers for their operations to guarantee productivity and efficiency, the records of their drivers will also play a large role in determining what you can expect from your commercial auto premium.
When adding a driver to a business’s auto policy, an insurance company’s underwriter will review the driver’s records, accident history, and prior insurance claims to help determine the risk of insuring the driver. Whether drivers are transporting cargo, goods, or passengers, all business auto operations will come with some inherent risk, making an insurance underwriter’s assessment of the drivers a key factor in determining coverage and rates for the policy.
When looking to hire a driver for your own business, keep the following in mind as red flags insurers will look for to determine the risk of a driver:
- Driving under the influence
- Less than 6 years of driving experience
- Excessive speeding
- Reckless driving
- License suspension or revocation
- Cell phone use while driving
- Failure to obey traffic signs
Of course, nobody is perfect and insurers may be lenient on more minor infractions that pop up in a driver’s record. Though any repetitive violations – however minor they may appear – can indicate potential risk in the eyes of an insurance company.
This makes it important for you to properly assess a driver’s history in the hiring process, as your business may be denied coverage or have it limited from the risky driver when you go to add them to your auto policy. To view a prospective employee’s driving record, employers would need to request an unattested Massachusetts driving record during the application process so they could judge the driver’s experience.
How to add employees to a commercial auto policy
If any of your employees are driving a vehicle for business use, they will need to be listed on your commercial auto policy. Any drivers or eligible drivers not included on a business’s auto policy may not receive insurance coverage if they are involved in an accident – leaving your business responsible for any associated fees.
If you have a pre-existing business auto policy and are looking to add a newly hired driver, you will need to contact your insurance agency or provider to update the policy. Adding new drivers or changing which drivers are authorized to operate company vehicles can be an easy addition to any policy, but may result in changes to your policy rates.
How are employees covered by commercial auto insurance?
A commercial auto policy offers protections for your company vehicles and its drivers for liabilities associated with them during work-related operations.
Your employees and vehicles will receive coverage for many vehicle-related incidents, but there are still some limitations, exclusions, and optional coverages business owners should be aware of. These range from policy to policy, but here’s what you can generally expect:
What is covered:
- Liability for bodily injuries or property damages caused by your company vehicle
- Physical damages to your company vehicle
- Medical payments
- Coverage if you are involved in a hit-and-run
- Coverage if you are hit by an uninsured driver
- Hired auto liability for accidents caused with rented vehicles (optional)
- Non-owned auto liability for accidents from your employee using their car for your business (optional)
- Glass or windshield replacement
- Driving for personal reasons (damage only)
What is not covered:
- Business or personal property in your vehicle
- Mobile equipment
- Intentional bodily injury or property damage
- Completed operations (the work you have completed)
- Towing (optional)
- Rental reimbursement (optional)
- Pollution
- Driving for personal reasons (only liability excluded)
Are employees taking commercial vehicles home after work covered?
Generally if the business’s vehicle is used after work/for personal use by employees with permission from the business, the carrier will pay for damages to the vehicle.
However, the driver may not receive personal liability coverage if they don’t carry their own personal auto policy or if the business does not have additional liability endorsements. So, while liability on a commercial auto policy will extend to cover the commercial vehicle regardless of business or personal use, it may not extend to cover the driver.
For more information on exactly how employees using a company vehicle will be covered, check out this article: What You Need to Know When Supplying a Company-Owned Vehicle to an Employee.
Are employees using personal vehicles for business covered?
As business use of a personal vehicle would not receive coverage through a driver’s personal auto policy, you may be wondering if and how they would be covered by a commercial auto policy.
If you or your drivers are using personal or rented vehicles for business operations, they may not receive full coverage under your commercial auto policy, and you would require a supplemental policy or endorsements to extend insurance to personal vehicles. In addition to your standard commercial auto policy, you would require a hired and non-owned auto policy endorsement to cover personal, rented, leased, or borrowed vehicles used for work operations.
Keeping employees covered on the road
When you have employees driving for your business, it’s important to ensure they are the right fit for your organization and are receiving the proper coverage. Now that you know more about how drivers will affect your policy, how to add them, and how they will be covered, you can stay informed when obtaining or updating your commercial auto policy.
If your business is looking to obtain a commercial auto policy and are interested in how much it will cost, reach out to us today to receive your own quote.
Outside of new drivers, it’s important for any business owner to periodically review your policies. To learn more on what you should be looking for and when to update, read our guide on why you should review your commercial insurance annually.
As we conclude our expedition into the realm of commercial auto insurance, it is evident that the right coverage is not just a formality; it is a pivotal element in steering your business towards success. From understanding the various coverage options available to tailoring policies that align with the unique needs of your fleet, this exploration has been a compass guiding businesses towards informed decisions.
In the dynamic landscape of commerce, where uncertainties can arise with every turn, the shield provided by comprehensive insurance coverage is your business’s safeguard. It not only protects your assets but also empowers you to navigate the challenges with confidence.
As you drive towards success, consider this exploration as a roadmap for choosing coverage that is not only robust but adaptable. Periodically reassess your insurance needs to ensure they align with the evolving nature of your business. The right commercial auto insurance coverage should not be static; it should be a dynamic force that propels your business forward.
“Driving Success” is not just a title; it’s a mantra that underscores the importance of proactive decision-making. May your choice of commercial auto insurance coverage be a driving force behind the success of your business. Here’s to secure and prosperous journeys on the road to success.