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I run a small business – am I covered under my car insurance?

The impact of your small business on your car insurance depends on the type of work you do and how you use your personal car for work purposes. If your business keeps you at home most of the time and you don’t use your vehicle you’ll probably pay less for car insurance than others who commute to work. However if you drive your car for work-related errands use it to visit customers drive long distances or use it to transport materials or employees you may pay more. In any case if you use your vehicle for any work-related purposes you should absolutely inform your broker and insurance company .

Is a personal car insurance policy sufficient?

Most personal car insurance policies will not cover you if you’re using your personal vehicle for work purposes or may not cover work-related items in your car if they are stolen or damaged. Your insurance company will define what is allowed under a personal car insurance policy when it comes to business – for example the majority of insurers are okay with commuting. It’s important to understand your policy and talk to your broker if you’re going to use your personal vehicle for anything related to your business.

The difference between personal and business car insurance coverage.

There are a lot of differences between commercial and personal car insurance. Mainly the distinction is in how much coverage is provided should an accident or loss occur while using your vehicle for work. For instance many commercial vehicle policies have increased liability coverage because using a vehicle for work increases the amount of liability risks. This means there is more insurance money to cover loss or damage if you’re involved in an accident.

Do you need commercial vehicle insurance?

If you’re just commuting to and from your place of employment (and not transporting materials or employees) you probably don’t need to worry about getting a commercial policy. However if you use your vehicle for any of the following you will want to discuss commercial vehicle insurance with your broker:

  • driving to work sites or clients
  • deliveries or carrying work-related materials
  • transporting people for a fee
  • transporting employees regularly
  • if you have work-related equipment installed on your vehicle (such as a snowplow tool boxes)
  • if employees or anyone not listed on your personal car insurance policy is driving the vehicle (even if it’s only occasionally)
  • if you your vehicle is owned or leased by a partnership or corporation or is registered to a business corporation or partnership

It’s important to note that your general business insurance won’t cover your vehicle – you’ll need a separate policy.

When to consider purchasing commercial coverage

You should consider purchasing a commercial vehicle policy if you use your vehicle for any of the above mentioned tasks or with anything to do with work other than commuting. A commercial policy will provide coverage where a personal policy will not. This coverage may be an additional cost but you could otherwise be paying out of pocket for damages losses lawsuits and medical benefits that can add up quickly.  If you’re self-employed or a small-business owner talk to your insurance broker. As your insurance expert your broker can help find the right protection and the most cost-effective coverage to help protect all the hard work you’ve done to build your business your brand and your reputation.