Don’t fall for the misconception that personal auto insurance is enough coverage while driving a vehicle for business purposes. Any vehicle used for business requires its commercial auto insurance policy. Commercial auto insurance protects your business, so getting the right policy is essential, especially for contractors. They face a higher number of risks, and without insurance coverage, they could lose their business and licenses. Here’s a guide to help navigate commercial auto insurance for contractors and how to find the perfect policy for your needs.
What Is Commercial Auto Insurance & How Does It Work?
Commercial auto insurance is crucial for any vehicle operating for business purposes and is sometimes referred to as business auto insurance. It can be an entire fleet or a single car that needs coverage. Commercial auto policies provide coverage for vehicles owned or leased by your business, vehicles hired, and any vehicle regardless of ownership used for business.
There are considerations that determine the cost and amount of coverage:
- Amount of vehicles
- Who will be operating the vehicles (driving history)
- Number of drivers
- If the car is owned or leased
- Type of business being conducted with the vehicle
For contractors, the cost might be higher due to the higher level of risk and exposure. Commercial auto insurance covers the cost of lawsuits, property damage, medical bills, and other expenses that can occur from an accident. Policies can be tailored to fit the contractor’s needs.
Common Insurance Claims & Other Beneficial Policies
Several states legally require businesses to obtain commercial auto insurance. Company-owned vehicles must be covered, as well as any vehicle transporting tools or equipment for business purposes and employees completing errands during work hours.
Contractor vehicles are exposed to unique hazards but here are some of the most common claims that occur:
- Traffic accident
- Property damage
- Bodily injury to others
- Bodily injury due to hazardous work
- Stolen equipment and tools
While commercial auto insurance is essential, there are still some useful insurance policies to examine. Comprehensive coverage can prevent insurance gaps and offer peace of mind if an accident occurs. Here are a few policies to consider for contractors:
- Business Owners Policy
- Uninsured Motorist Coverage
- Professional Liability
- Hired & Non-owned Auto
- Property Damage Liability Coverage
Best Operating Practices
Having the right policies is one of the best practices to protect your business and employees. Here are some operating practices to keep everyone safe and minimize any risks and liabilities:
- Complete background checks and review driving history
- Provide comprehensive training
- Require annual physicals to maintain employee health
- Implement regular drug testing
- Establish injury prevention programs
- Discuss all liabilities with employees
This list is not exhaustive but can act as a starting point. Contractors are in a hazardous industry, so safety should be the top concern.
Stay Safe With Biscayne
Finding the right insurance policies for contractors can be overwhelming. There are many factors to input for coverage, and any insurance gaps can result in financial ruin. Biscayne Risk & Insurance has years of expertise in the industry and can analyze any risks to find you the perfect policies. Contact us today to get started.