How to Get the Right Commercial Vehicle Insurance for Your Business – Guest Post

For anyone operating a business, small or home-based, it is a requirement in Ontario that you have commercial auto insurance on any vehicle that you use for work.

However, what does this mean exactly? Commercial auto insurance is different from your personal auto insurance.

To a certain degree, they both cover the same things at a high level. Still, commercial insurance will not cover you if you are using the vehicle for personal use, and vice-versa.

For small or even home-based businesses, this can be huge. With your finances already stretched, the thought of an unexpected accident or loss can be overwhelming.

There are different types of commercial insurance (as noted in the following list), so it’s worth making sure that you have the right one for your needs. This will also affect your premiums, so it’s even more beneficial to get the right coverage.

• Business only. This coverage is best for small or home-based businesses that use their vehicles occasionally. It’s not for daily drivers.

• Business use for multiple drivers. For the larger company, where multiple people can use the same vehicles for work, this will cover all the employees under the owner’s insurance.

• Commercial auto use only. If any modifications have been made to the vehicle for work purposes (for example, installing a roof rack, or shelving and special cabinets) and the vehicle is driven daily for the sole purpose of work, then this is the coverage for you.

Commercial insurance covers all vehicles used for work; this includes motorbikes and food trucks. Therefore, it’s not as limited as personal insurance would be.

Different Types of Risks That Commercial Vehicle Insurance Covers

Commercial auto insurance is required if you use your vehicle in any of the following scenarios:

• Transporting goods, equipment, cargo, or supplies. Construction or contracting work requires tools and other building materials.

• Sales visits. So, you may have samples of the product, literature, and other supporting documents.

• If your employees need to drive for any work-related reason, or if you are transporting people, such as with Uber or as a taxi.

Every scenario also comes with its own risks, and this is where commercial auto insurance comes into play.

Bodily injury is typically what comes to mind first when talking about an accident. Commercial auto insurance, at a comprehensive level, will cover expenses in the event of injury or death even if your driver was at fault.

Property damage is perhaps not something you want to consider; no one expects the brakes to fail, or a driver error that sends your vehicle through a storefront. Depending on your level of coverage, however, commercial auto insurance will cover the costs of damage to the property.

Uninsured motorists are something we never hope to encounter, but they are out there. Commercial auto coverage takes the sting out of an accident involving uninsured motorists by covering injuries, property damage and any legal fees.

Then, there are the claims we never think of, even with our personal insurance. For example, vandalism, storm damage, and even stolen vehicles will all have an impact on your working day and should be included in your commercial auto insurance policy.

How to Get the Right Commercial Vehicle Insurance for Your Needs

When you’re ready to start thinking about getting the right commercial vehicle insurance, you want to make sure that you are not just buying the first policy you see.

You need to consider why and what you are insuring. A food truck with three people, food, and equipment such as stoves and ovens needs a different level of insurance compared to an SUV that’s only being driven by one person three times a week.

Make sure you do your research and compare policies. Ask yourself: can you bundle other business insurance as well to help you save money?

Before you take out your policy, make sure it also extends to the replacement of the vehicle in the event of an accident and a rental vehicle (if required).

Once you have your policy, don’t just pay and forget about it. It’s a good idea to review it yearly to ensure you are still getting the most out of it, and that any changes to the policy do not impact you in a negative way.

What types of claims lead to rising premiums for commercial vehicle insurance?

While you may pride yourself on being the safest driver on the road, you cannot count on everyone being the same. It’s easy to say, “Just avoid an accident.” However, this is something that is often out of your control.

With the rise of commercial vehicles being on the road, accidents and collisions do happen. Uninsured motorists also have a big impact, despite insurance being mandatory. Commercial auto coverage may assist you with the financial payout for any claims made.

If you have insurance with no-fault protection or safe-driver coverage, then you may not see a big change in your premiums.

If you or your employees (who use your work vehicle) have had accidents in the past, then this can increase your costs. The number of accidents in your past or even theirs will have an impact on your policy costs today.

The severity of the accident will also have a big effect. For example, a minor fender bender will have a smaller increase than an accident that writes off the vehicle.

Commercial Auto Insurance is Your Work Vehicle Lifesaver

Whether you are a business of one or a company of 30 or more employees, if you have any vehicles that are used for work in any capacity, then commercial auto insurance is essential.

With the coverage to protect you from expensive claims due to property damage, medical bills, and more, it can be the difference between returning to work and having to close your business due to financial expenses that you just can’t afford.

Fortunately, with the three different types of coverage available, you will be able to choose the right one for your needs.

Author

Jessica Coates is a blogger in Toronto. She graduated with honors from the University of British Columbia with a dual degree in Business Administration and Creative Writing. Jessica Coates is a community manager for small businesses across Canada. When not working, she leisurely studies economics, history, law and business solutions.