Business Auto Insurance Quote For Small Business

Small business insurance buyers are required by state law to purchase commercial auto insurance for all cars and vehicles that are titled in the name of the business. Mandatory coverages typically include Auto Liability, Uninsured Motorists, and Underinsured Motorists coverage in most states. In addition mandatory minimum limits of coverage must be carried. Many states require require a minimum limit of $50,000 Combined Single Limits for these coverages. Of course, carrying the minimum required limit is not advisable since damages could very easily exceed these amounts resulting in significant out of pocket expenses or bankruptcy.

Under most state laws, three different parties can be sued anytime there is an auto accident involving injury to a passenger, the driver or passenger of another vehicle, a pedestrian, or property damage to another vehicle. The three parties that can be sued are the driver of the vehicle, the owner of the vehicle, and any organization for whose purpose the errand is being run. As a general rule, the commercial auto insurance follows the owned vehicle and covers any driver who has the permission of the owner to drive. The business can also be covered for its vicarious liability arising out of the use of a non owned, borrowed, or hired vehicle.

Typical Business Auto Insurance Coverages And Limits

• Auto Liability: $1,000,000 Combined Single Limits For Bodily Injury and Property Damage
• Uninsured Motorists: $1,000,000
• Underinsured Motorists: $1,000,000
• Medical Payments: $1,000
• Comprehensive: Actual Cash Value of vehicle
• Collision: Actual Cash Value of vehicle
• Non Owned And Hired Auto Liability: $1,000,000

Auto Liability insurance protects against lawsuits that are filed by injured passengers or other third parties where it is alleged that the negligence of the driver or owner of the vehicle has resulted in bodily injury or property damage. Auto accidents represent the single largest liability that is faced by most small businesses. The reason for this is because it is possible to negligently injure or kill multiple passengers in your own car or in other cars. In addition, property damage claims can be high due to the prevalence of expensive autos on the roads that can be easily totaled. For this reason, it is strongly recommended your commercial auto insurance policy should include Auto Liability limits of at least $1,000,000. In addition, you should strongly consider carrying an Umbrella Policy to extend the limits by an additional $1,000,000.

Uninsured Motorists insurance protects against situations where an uninsured motorist driving another vehicle negligently injures your passengers and causes property damage to a vehicle that your business owns. Likewise, Underinsured Motorists protects against the same situation where the other driver or vehicle causing the injuries carries inadequate insurance to cover your damages. Uninsured Motorists and Underinsured Motorist coverages allows your small business automobile insurance carrier to provide a source of recovery to your business so that any bodily injury or property damage will be reimbursed up to the policy limits. Once again, it is strongly recommended that your commercial auto insurance policy should include limits of at least $1,000,000 for Uninsured and Underinsured Motorists because of the severity of injuries that can arise from auto accidents.

Medical Payments coverage provides medical reimbursement up to the policy limit in the event that your passengers are injured in an auto accident. A typical policy limit for this coverage could range from $1,000 to $5,000. This coverage may be redundant with Workers' Compensation if the passengers are primarily employees of your company and for this reason many business owners choose to not carry this coverage unless it is mandated by state law. Many businesses that frequently transport non employee passenger may want to voluntarily carry this coverage.

Comprehensive insurance (also knows as Other Than Collision) provides reimbursement for property damage to cars that are owned by your business arising out of certain perils other than vehicle collision such as windstorm, flood, hail, theft, fire, and vandalism. Collision with an animal such as a deer is also covered by Comprehensive. Comprehensive coverage on a business auto insurance policy is usually subject to a deductible that can range from $0 to $1,000 per accident.

Collision insurance provides reimbursement for property damage to cars that are owned by your business arising out of collision with another vehicle or object. Collision will provide reimbursement regardless of whether the accident is the fault of your driver or the other driver. However, if the other driver is at fault, you should collect from his Auto Liability carrier instead of turning the claim in to your insurance carrier. Collision coverage on a commercial auto insurance policy is usually subject to a deductible that ranges from $0 to $1,000 per accident.

Non Owned Auto Liability insurance provides coverage for liability arising from the use of autos that are NOT owned by your business. Businesses benefit from the use of vehicles that are owned by employees to run errands or make sales calls. For this reason, businesses have vicarious liability when they are involved in an accident where a third party is injured. Non Owned Auto Liability provides coverage for the business itself but not for the driver of the vehicle. The driver of the vehicle needs to look to his own Personal Auto Policy for protection.

Hired Auto Liability provides coverage for liability arising from the use of hired or borrowed vehicles. The most common scenario occurs when a business leases a vehicle from a rental car company after landing at an airport or to make a special delivery. Hired Auto Liability covers both the business and the driver in the event of negligence involving an auto accident with bodily injury or property damage to a third party. However, Hired Auto Liability does not cover damage to the rental vehicle itself. Hired Car Physical Damage coverage should be purchased to cover damages to the rental vehicle. This coverage typically costs less than $350 a year and can be less expensive than purchasing the Collision Damage Waiver from the rental car company. However, the coverage offered by the Collision Damage Waiver is broader than Hired Car Physical Damage since the Collision Damage Waiver will cover damages to the car on a Replacement Cost basis and will also pay for loss of use damages to the rental car company while the vehicle is being repaired. It is strongly recommended that all small business automobile insurance policies should include both Non Owned and Hired Auto Liability Insurance.

The following special situations require a discussion with your insurance agent about what additional policy endorsements may be required:

• Hauling hazardous materials that require a special MCS-90, ICC, or state filing.
• Driving customer's cars or providing valet parking may require Garage Liability Insurance or Garagekeepers Liability Insurance.
• Vehicles that are titled in an individual name instead of in your business name.
• Vehicles with custom equipment that was NOT installed by the manufacturer.
• Business travel where you drive outside of the U.S. or Canada may require Foreign Excess Auto Liability Insurance.
• Employee use of business vehicle as sole personal vehicle may require Drive Other Car endorsement unless such employee or spouse has a Personal Auto Policy.
• Use of rental vehicles.

The Cost Of Your Business Auto Insurance Is Determined By The Following Factors

• Use of vehicle.
• Gross Vehicle Weight of vehicle.
• Driving radius of vehicle.
• Garage location of vehicle.
• Year, make, and model of vehicle.
• Original cost new of vehicle.
• Loss history of prior policies.
• Motor Vehicle Reports (MVR's) of drivers.
• Number of vehicles in fleet.
• Limits and deductibles chosen.