And now for the million-dollar question: Does your business have the right type of commercial auto insurance? With options like hired, non-owned, and traditional commercial vehicle insurance, it can be easy to end up with the wrong or inadequate coverage. In order to make the right decisions, you need to understand the basics of commercial auto insurance, including the difference between hired and non-hired policies.
The good news is that when broken down, it’s not overly complicated. Here’s what you need to know.
The Basics of Commercial Auto Insurance
It’s well-known that any business that hires drivers needs to carry a commercial auto insurance policy on them, unless they are independent contractors, but that’s a completely different story. What matters is that commercial auto insurance is designed to cover both the vehicles that your employees drive, as well as the drivers themselves.
This is done in order to prevent your workers, as well as your business, from having to pay out of pocket should an accident occur in the middle of a delivery, on the way to a meeting, or while doing any other type of driving for the business.
Standard, also known as personal, auto insurance, won’t cover anything if the accident happens while the driver is on the road for business, making commercial auto insurance a must-have.
Three Types of Commercial Auto Insurance
To break things down even further, there are three main types of commercial auto insurance. They are:
Owned – As a traditional type of commercial auto insurance, it’s important to know more about it in order to understand the other two options. Owned commercial auto insurance provides coverage for vehicles that your company owns, as well as for the employees that your business hires to drive them. Whether you run a pizza place with a dedicated delivery service, or have employees take company cars out for sales calls, as long as your business owns the vehicles, you need an owned commercial auto insurance policy.
Hired – Next, there’s hired commercial auto insurance. Despite the name of the policy designation, this type of insurance isn’t for the employees that drive your company vehicles. Instead, the term refers to vehicles that your company doesn’t own. If your business rents or leases the vehicles, rather than buying them outright, then a hired policy will provide the coverage that your business needs.
Non-Owned – Finally, there are non-owned commercial auto insurance policies. If you hire delivery drivers and ask them to use their own vehicles for business purposes, then this is the type of policy that your company needs. Typically, businesses that allow employees to use their own vehicles in this manner only have them run small errands, like doing bank deposits, or bringing necessary paperwork to a client.
Contact Spivey Insurance
If you have questions about your business’ commercial auto insurance or need to see if a hired or non-owned policy will work best for your company, reach out to Spivey Insurance. Our well-trained agents can answer any questions that you may have, as well as help you choose the best policies and coverage for your business needs.