NY Business Insurance: What You Need to Know About Commercial Auto

Posted by John Cofini on Thu, Apr 18, 2013 @ 01:01 PM

Imagine this scenario…

While on a job site, you send an employee to a supplier to pick up a part you need. The employee drives his own vehicle, and on the way he hits a pedestrian, resulting in $50,000 in medical bills, lost wages, pain and suffering. Since the employee was driving for a business purpose, the pedestrian’s insurer denies coverage. And your business doesn’t have non-owned auto liability coverage, so the $50,000 loss isn’t covered.

Now you’re facing a lawsuit that could take your bottom line on an unexpected detour.

This is just one of many scenarios you could face if you’re operating without commercial auto coverage. The risk of a serious accident wiping out your business far exceeds the premiums you’ll pay for this needed New York business insurance coverage, so it doesn’t make sense to get sideswiped by a lawsuit when it’s so easy to avoid it.

How do you know if you need commercial auto coverage as part of your New York business insurance?

In general, you need a business auto policy if you: 

  • have vehicles owned by the company that are used in tasks related to your business;
  • are using your vehicle to transport goods or people for a fee or using your vehicle to conduct a service;
  • are hauling a considerable weight in tools or equipment or towing a trailer used to conduct your business;
  • have employees who operate company vehicles.

What does business auto insurance cover?

A commercial auto policy covers three basic areas: 

  • Physical damage insurance - includes collision and comprehensive coverage;
  • Liability insurance − includes bodily injury, property damage, and uninsured/underinsured motorist coverage;
  • Other coverage − includes medical payments, towing and labor, rental reimbursement and auto loan or lease gap coverage.

Don’t believe these costly myths

Many business owners believe they’re immune from liability if their employees carry auto insurance. Others believe that if their vehicle is registered in their personal name instead of the business name, commercial coverage is not necessary and their personal auto policy will cover the auto.

These myths could cost you plenty if you buy into them. Most personal auto policies exclude coverage for using a vehicle for commercial purposes. And if you’re relying on your employees to have their own personal auto insurance, how do you know they aren’t driving uninsured without your knowledge? Without business auto coverage in place, you could be setting yourself up for an uncovered liability.

While it’s true that some commercial auto policies include non-owned auto liability coverage, several court decisions in recent years have led insurers to start limiting this coverage or requiring that it be purchased as a rider or endorsement. When choosing your commercial auto insurance, you can save money by finding a good insurer with broad based coverage that includes this coverage. But whether the coverage is included as part of your business auto policy or purchased as additional coverage, it’s critical to have it if you have employees who might use their personal vehicles for work purposes.

Don’t let a costly surprise take you and your profits on an unexpected detour. Let the New York business insurance experts at BNC Insurance and Risk Advisors make sure you have the coverage you need to keep your operations – and your profits – rolling along smoothly.

For another great New York business insurance resource, download our free report “Ten Unexpected New York Business Exposures That can Obliterate Profits in the Blink of an Eye” and discover costly business exposures that can hurt your bottom line. 

Tags: new york business insurance, NY business insurance, commercial auto coverage, commercial auto insurance, non owned auto liability coverage, business auto insurance, commercial auto policies