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Pam's Insurance Site

When I bought my first house, I was already going into a lot of debt. I didn't have the money to seriously insure it, so I bought only the bare minimum without consulting an insurance professional. That was a big mistake on my part. It could have turned out alright. That is, if my house hadn't been in the path of a huge storm. Huge gale winds knocked a tree down straight through my roof. My house was practically destroyed, and my minimal policy didn't cover nearly enough. I spent years and years trying to get myself out of that financial mess. Since then, I have always been very cautious in learning about insurance and talking to the real professionals.

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What Every Small Business Owner Needs To Know About Auto Insurance

Owning a business involves a lot of paperwork, especially insurance to protect you, the business and employees. If you have any employees who drive for work-related task, there are some things you need to know about auto insurance to protect your small business.

Commercial Auto Insurance Is Only For Company Owned Cars

Commercial auto insurance is designed to cover vehicles that are owned by the company. For example, if you are a plumbing company and own several work vans, you'll need commercial auto insurance. However, any car that has the company name on the vehicle title must be covered under commercial auto insurance. So even if you own a dentist office, but you have a work car for running errands, it must be covered under commercial auto insurance. If someone uses their own car or borrows someone else's personal car, commercial auto insurance is not necessary.

Commercial car insurance costs significantly more than personal insurance because it comes with greater risks. Insurance providers assume there are more people using the car, increasing the chance of collision. In turn, however, commercial car insurance comes with additional benefits, such as business interruption coverage, so if an employee is injured in a car accident, you get reimbursed for their pay while they are recovering. There are some ways to reduce the expensive premiums, including hiring drivers with a safe driving record, getting a safer car, choosing a high deductible and installing anti-theft devices.

If Employees Drive Their Cars for Business Needs, Get a Non-Owned Policy

In a lot of businesses, if an employee needs to run a business errand, they just use their own car because it's not cost effective for a company to purchase company cars and pay for commercial insurance for a few errands here and there. If this is the case, you don't need commercial auto insurance. In many cases, the employee's personal auto insurance is enough if the car isn't used primarily for business.

However, even if the employee has personal car insurance, they may not have enough liability coverage to completely cover any necessary repairs or medical expenses. This is why it's important to add a non-owned policy to your business insurance. This coverage is designed to offer extra protection when employees are injured in their own car while performing business tasks.

You May Be Responsible for Employees Actions

If your employee causes an accident, and the victim decides to sue, you may be held responsible if you are found guilty of negligence or vicarious liability. Negligence means you didn't do your part to ensure you only allow good drivers on the road. You are required to take reasonable action to determine if they are a safe driver, such as checking their driving history and making sure they have an active license. You must also make sure to promote good driving by having policies in place and ensuring employees comply.

Vicarious liability means that you didn't really do anything wrong, but since the driver is your employee, you are responsible for their actions when they are performing a business errand. However, you are only responsible if they are performing a business-related task, which can get sticky, especially if they stop to make a personal errand on the way. This does not include obviously dangerous actions. For example, if your employee decided to ram into a car because they cut them off, it's not your responsibility.

Whether your employee's job involves driving all day or if they just pop out to make a few errands, you need to consider auto insurance. As the business owner, it's your responsibility to ensure that everyone is covered and only safe drivers are on the road. For more information about auto insurance for your small business, contact an insurance provider today. You can also visit http://www.collinginsurance.com/ to learn more.