Why do I Need a Business Auto Policy? Answered!

Blog > Why do I Need a Business Auto Policy? Answered!

Why do I Need a Business Auto Policy? Answered!

If you’ve started up your own business and use your personal vehicle, you might wonder: “Do I need a business auto policy even if I have personal auto insurance?” If so, you’re not alone. It’s easy to assume one policy covers everything, but when it comes to business use, relying on a personal policy can leave you vulnerable. Many new business owners, like Adelyn, make this mistake and conduct business efforts without business auto insurance.

Adelyn, who launched a floral delivery service, used her personal car for work, believing her personal auto insurance would be enough. However, after a collision during one of her deliveries, her claim was denied because her personal policy didn’t cover business use. Realizing the gap in coverage, Adelyn switched to a business auto policy, ensuring her vehicle and business were fully protected.

This story shows just how crucial a business auto insurance policy can be if you use your car for work. Business vehicles have a 20% higher likelihood of an accident compared to personal vehicles, based on a study by The Hartford. This added risk is one of the reasons why business auto policies are designed to offer higher liability limits and broader coverage, ensuring you’re financially protected if an accident happens while you’re working.

Business Auto Policy

Why You Need a Business Auto Policy Even If You Have Personal Auto Insurance

Like Adelyn, many new business owners assume their personal auto insurance will cover them on business errands, especially when they only own a personal vehicle. So, one policy should cover one vehicle, right? Unfortunately, that idea is not correct and can lead to expensive surprises. Your personal policy only covers non-business use, such as commuting or running personal errands. A business auto insurance policy ensures you’re covered if an accident occurs during work-related activities.

 

Business Auto Insurance vs. Personal Auto Insurance: What You Need to Know & Why It Matters

While your personal car insurance policy offers protection for personal use, business auto insurance extends coverage for the additional risks you may face when traveling for business. If you rely on your personal car for business tasks, this coverage gap can leave you exposed. You could be on the line for liabilities, damages and even lawsuits. Plus, you may have to pay for damages and legal fees out of pocket. That could put you in serious debt!

The main difference between these policies is in what they cover. Business auto insurance protects you while driving on business errands. In contrast, personal auto insurance covers you while driving to work or for personal errands and pleasure. Business policies typically offer higher liability limits and additional coverage options tailored to business-related risks. This helps ensure you’re protected against scenarios that personal policies don’t cover. If Adelyn had been driving from home to her office job or worksite, she would have been covered. But since she was conducting work activities while using her personal vehicle, she’s not covered! Thankfully, Adelyn secured a business auto policy as soon as she found out. If you’re still unsure of where you stand, take a look at the checklist below to determine whether you’re in need of a business auto policy.

 

 

business auto insurance

 

Did you check any of the above boxes? If you did, it may be time to consider switching to a business auto insurance policy. This type of policy is designed to cover the unique risks associated with business use and can provide higher liability limits, coverage for business property, and additional protections not included in personal auto insurance.

 

Using an Independent Insurance Agent Vs. Captive Agent for your Business Auto Policy

If you’re in need of a business auto insurance policy, choosing between an independent insurance agent and a captive agent can significantly impact your coverage and costs. An independent insurance agent offers access to a wide range of insurance providers and coverage options. This allows you to choose coverage tailored uniquely to your needs at the best price available. A captive agent represents only one insurance company, limiting your options and potentially leading to a higher premium. Though, captive agents do have simplified policy choices and brand trust. Often, people don’t know the difference between the two! Having accurate information provides a clearer idea of who you’d like to work with based on your values.

 

 

Business Auto Insurance

 

Get a Free Business Auto Policy Quote from an Independent Agent | YourPolicy

Adelyn’s experience is a valuable reminder that relying on personal auto insurance for business use can lead to denied claims and unexpected expenses. If you’re using your vehicle for work-related activities—whether it’s making deliveries, transporting equipment, or visiting clients—a business auto insurance policy is essential to protect both your vehicle and your livelihood. Personal policies simply won’t cover you in these scenarios, leaving you vulnerable to costly liabilities. Don’t let an uncovered accident disrupt your business.

If you have any questions or need help, you can call a YourPolicy agent at (866) 236-0203. Get in touch today to make sure you have the right coverage.

 

Business Auto Insurance Frequently Asked Questions

Q: What does a business auto policy cover?
A: A business auto insurance policy covers liabilities and damages during business use, including accidents, injuries, and property damage.

Q: What is the purpose of a business insurance policy?
A: It protects your business from financial loss and legal issues related to using vehicles for work purposes.

Q: When do you need commercial auto insurance?
A: You need commercial auto insurance if your vehicle is primarily used for business activities, such as transporting goods, employees, or clients.

Q: What is the difference between personal and business car insurance?
A: Business auto insurance covers work-related driving, while personal auto insurance is for non-business use.

Q: What is covered and not covered under a business auto policy?
A: A business auto insurance policy covers liability, collision, and comprehensive damages for work-related driving but may exclude personal use and certain high-risk activities.