Are your company vehicles underinsured?
Many small business owners might think they don't need commercial auto insurance, or may misunderstand why they need it and what it costs. Some may think their personal policy covers their vehicle. Others don't realize that a single work vehicle can carry real risk. One of the most understood aspects of commercial auto insurance is the cost of coverage.
Personal Auto vs. Commercial Auto
Most personal auto policies specifically exclude coverage when a vehicle is being used for business purposes, owned, or used by your business entity.
If your vehicle is used for making deliveries, transporting equipment, or driving to a job site, personal coverage just won't cut it.
If an accident happens during work-related use, the claim could be denied. Not only could you be facing the out-of-pocket expenses, but your personal auto coverage could be dropped.
If an employee causes damage or injures someone while using their vehicle for business purposes or while operating a vehicle owned by your business, a lawsuit is certain to follow.
The National Association of Insurance Commissioners (NAIC) warns consumers that a personal policy may seem convenient, but it can leave business owners exposed to vehicle repairs, medical bills, and liability claims they weren't expecting.
You don't need a fleet of vehicles to warrant commercial auto coverage; a single vehicle is enough to create serious exposure. Whether it's a delivery van, your pickup truck, or even your personal car occasionally used for business, a single accident can lead to costly repairs, medical bills, and legal fees.
Auto Claims Rising in Severity and Costs
Do you think a commercial auto policy is out of reach for your business? You may be surprised to learn that commercial auto premiums vary widely based on factors like vehicle type, radius of operations, usage, and garaging location.
The cost of not having insurance can often be much higher than your premium.
The severity of commercial auto claims jumped 78% in the last decade, according to the Insurance Information Institute. That means when an accident happens, it's not just inconvenient -- it can be financially disruptive. Rising medical costs, legal expenses, and vehicle repair costs can all increase the financial impact of accidents.
Think you can avoid an accident on the road?
Think again.
There are approximately 6 million police-reported traffic crashes in the United States each year, resulting in 2.44 million injuries and more than 40,000 fatalities, according to the US Department of Transportation (USDOT).
Distracted driving is the leading cause of accidents. 8% of fatal crashes, an estimated 13% of injury crashes, and an estimated 13% of all police-reported motor vehicle traffic crashes in 2023 were reported as distraction-affected.
According to the National Highway Traffic Safety Administration (NHTSA), "Distracted driving comes in many forms, but cell phone use... is the most common distraction." NHTSA said texting is considered the most dangerous type of distracted driving because it combines visual, manual, and cognitive distraction.
It's not just distracted drivers that create a risk every time you're on the road, either.
Alcohol impairment accounts for 30% of overall traffic fatalities.
Speeding is another risk of the road: 19% of all drivers involved in fatal traffic crashes were speeding at the time of the crashes, and 29% of all those killed in traffic crashes were in speeding-related traffic crashes.
To put it simply: when your vehicle is on the road, it's at risk.
Sometimes that risk is internal: you or one of your employees may be temporarily distracted while driving. Other times, that risk is external. You never know when someone will speed through a red light, get distracted by a text, or make the unfortunate decision to drive impaired.
With the rising costs associated with car accidents, from medical to legal to vehicle repair costs, the best way to fully protect your business is to ensure your vehicles have the right type and amount of coverage.
To get a quote for commercial auto coverage for your vehicle, contact a trusted insurance professional. You may be a safe and reliable driver, but only commercial auto insurance can protect your business assets from the other risks of the road.