Businesses face different problems than private car owners when it comes to purchasing vehicle insurance, including more risk. So if you’re a business owner, you need to purchase the right type of insurance to make sure that you are adequately protected from financial losses. Here are five tips that can help.
1. A car used for business use is often driven into areas that most people avoid.
Businesses try to serve the largest possible territory to increase the size of their potential customer base. This means that salespeople, customer service personnel, and delivery drivers will need to go into areas that may have high crime. The chances increase exponentially for vandalism and damage to the car. When insurers know of your car’s business use, premiums increase because of the larger risk.
2. Businesses often use many drivers to operate the vehicle.
While insurers try to have a list maintained of approved drivers, it is not always possible to have a perfect list at all times. Employees come and go. There can be a lag between a change of drivers and the receipt of accurate driving records on new drivers. Insurance companies work on the idea that company drivers will be relatively high risk. This way, they can cover anyone who drives the car even when the records are not up to date. Employers who provide the insurer with an accurate driver list can sometimes reap the reward of lower premiums.
3. Liability risks are high when you begin to put vehicles on the road.
When a company car is wrecked, the assets of the company are on the line. Unlike individuals, most companies rely on their assets to generate the revenues that keep the business running. If this is the case, the company may have to not only declare bankruptcy but also go out of business completely. Savvy companies buy liability insurance, but that can be much higher than a personal policy
4. For individuals who use their car for their sole proprietor business, it’s vital to disclose this to your insurance agent.
Consult with your agent regarding the specific requirements of coverage on business use of a car. Some companies will not penalize you unless you use the car for your business at least half the time. However, if you are using your vehicle frequently for your business and not declaring it, the insurance company may choose to not cover a loss. It is better to increase your premium than to find yourself uninsured in an accident.
5. If you plan to use the car to carry products or valuables, make sure that you have insurance that covers the contents of the car.
Comprehensive insurance normally covers against theft of the contents in personal cars. In business cars, the contents can be quite expensive. Since these items are not considered personal