What Kind of Car Insurance Do You Need If You’re Self Employed?

As a self-employed business owner, you may need additional car insurance. It all depends on a several factors. Whether you work at home and never leave the house or you use your car for an office, you do notself want to wait until you have a claim to find out that your personal insurance policy does not cover business uses.

I have good insurance!

You may have strong personal car insurance, but it may not cover your business related driving. Most individual or family car insurance policies specifically exclude liability for events arising from an accident that occurs in a car being driven for business – your fault or not.

  • Example #1- Your teenager drives your pick-up truck for your landscaping business. If your teen is in an accident and reports the claim, he will be told there is no coverage.
  • Example #2 – You are a stay-at-home mom running an online business or a florist with three locations. If the mom is involved in an accident on the way to church, her accident will be covered, but the florist will not be if his personal car is damaged on a trip between stores.

Your personal car insurance will not cover your vehicle(s) if:

  • The vehicle is used to transport commercial goods
  • The vehicle features work-related equipment, tools, and fixtures
  • The vehicle as a matter of course transports people.

So, depending on how you use your vehicle, you may want to investigate the value of commercial car insurance with a credible commercial insurance professional.

Ask yourself a question –

You may need commercial car insurance if:

  • Any of your vehicles serves as a taxi or limo
  • Employees or drivers – not listed on your insurance policy – regularly or occasionally drive your vehicle
  • Any of your vehicles pick up or deliver goods, supplies, or materials
  • Your vehicles are leased or rented to others
  • Any vehicles are owned or leased by your partnership or corporation
  • Your vehicles are equipped with cooking or catering equipment, snowplows or hydraulic lifts
  • Any vehicles have permanent tool boxes, ladder racks, or refrigeration equipment
  • Your vehicles are registered or titled to a business entity

What’s the difference?

Your liability and potential liability increase when you use the vehicle(s) for daily operations. Obviously, if you transport people as part of your business and/or damage and injure people in other vehicles, you present yourself as a deeper pocket than an individual. And, if you own several vehicles or lots of equipment, you need the assurance that there is broad liability coverage.

Businesses have issues that individual drivers do not have. To meet those obligations, commercial auto insurance will:

  • Provide considerably higher liability limits
  • Extend the liability coverage to any new vehicles purchased or hired
  • Cover the cost of renting a car while replacing an inoperable vehicle
  • Consolidate vehicles and equipment under one deductible
  • Protect you and employees while driving non-owned vehicles

At what cost to me?

Your insurance premium may go up, down, or stay the same. But, you must tell your insurance specialist, or the cost to you may be very significant. Any increase in cost to you is a small price to pay for confidence and assurance that your vehicles and contents will be covered when your risk increases because:

  • Your business puts you on the road frequently or over long distances
  • Your vehicle(s) carry large or pricey items
  • Your vehicles are on a frequently stolen vehicles list
  • Your business needs increase the number of vehicles

In the insurance world, when risk increases, so may the premium charged to you. Start now to work with your insurance pro to determine your business needs and manage those risks.