Small business auto insurance:

Every business has some exclusive company owned vehicles for their purpose. So situations may arise which may led to injury to others property as well as injury to self. So taking an automobile insurance will provide you valuable protection for your company owned vehicles. It is not necessary that a company has only self-purchased vehicles in use. There may also be certain vehicles which are leased or rented for company purposes. Therefore auto insurance will help a lot in covering the expenses that may arise out of accident or any other situations such as fire, physical damages etc. Before going into the necessities of small business auto insurance we must first understand what auto insurance is.

What is auto insurance

Auto insurance also known as vehicle insurance is the insurance primarily applied to vehicles such as cars, trucks etc. The main intention behind such insurance policy is to provide protection to the person taking the insurance against the losses incurred in some accidents or damages caused to any other party. Such auto insurances cover the insured party, the insured vehicle and third party.

Insurance coverage for small business

In businesses generally the third party claims for the damages that has been caused by the company vehicle. Also there might be some instances where the companys vehicle might incur some physical damages out of accident or fire. So in this case it is better to have auto insurance so that the loss of the business is mitigated as the insurance company pays for the damages. However in todays world the third party claims have increased dramatically thereby creating a need for auto insurances for these small businesses. Now we would discuss regarding the coverage the small business auto insurance provides. Basically insurance coverage for auto insurance covers liability insurance and collision or comprehensive options.

1. Liability insurance: As the name suggests liability insurance protects you in case you incur any liability to any other person. This means that you are liable to a third person for the damage caused or any bodily injury caused to that person. Such cases happen generally when the company owned vehicles have done any accident and has caused bodily injury to any third person. So the third person brings a suit to recover the damages and seek compensation. Therefore if you have third party auto insurance then the insurance company pays the compensation and the business doesnt has to incur the loss. This liability insurance also includes and covers the liabilities incurred by the vehicles of the employees who use their own vehicles for office use. But basically the employees personal auto policies primarily cover the damage to their automobile.

2. Collision or comprehensive insurance : This type of insurance coverage covers the physical damages incurred to the vehicle. In an accident there is maximum chance that the vehicle may be damaged so if you have an insurance policy then the insurance company pays for the loss and damages. However the insurance company doesnt pay the whole amount of money of the vehicle. It only pays that particular amount by which the vehicle can be restored to its original working position. If suppose the vehicle in such a condition that it has become useless and cant be repaired then the company pays for the whole price of the vehicle, subject to the terms and conditions of the company. If the insurance policy is of comprehensive nature then the company will also pay for the physical damages to the vehicle arising out of fire, lightning, vandalism, hail, flood etc.

Apart from the standard coverage there is some additional coverage also covered by the business auto insurance policy: -

1. If in a particular event your vehicle has been stolen then the policy covers the transportation expenses also. But it is to be noted that such vehicle should be either a business owned vehicle. Your personal vehicle if stolen, then your personal auto insurance policy will come into play and not the business auto insurance.

2. small business auto insurance also covers damages of the glasses in the automobiles. In an accident you may incur damages to the glasses of your automobile which the insurance company will pay.

3. This policy also covers the damages caused to permanently installed systems in the automobile such as sound systems, reproducing equipment, compact disk players.

When to take business auto insurance

Now it is not always necessary for each and every business to take auto insurance. You must decide this thing after analyzing your business requirements and reserves. You need to first understand how much does your business depends on the automobiles for it to be effectively carried out. Then how many business owned vehicles are being run on a daily basis and how many are there in the risk zone. All these things are necessary because you will have to pay the insurance premium for the insurance policy. So unless and until you require it is not advisable to pay unnecessary premiums.

Now if your business has extensive usage of vehicle then it is a must to take auto insurance policy. Though you might have personal auto insurance policy, it might not cover the complete loss. So it becomes necessary to have business auto insurance policy. As above mentioned the categories that are covered by the business auto insurance policy, you can very well determine what benefits you will have if you have a business auto insurance policy. However you must also have a look in the reserves of your business. Accordingly you should take a decision. If you have separate liquid assets for miscellaneous purposes where you can purchase a new vehicle then there is no point in investing in insurance policy. Also you need to first determine whether the premium that you are going to pay is close to the value of the vehicle. If it is so then again there is no point in paying such premiums as you can directly buy a new vehicle. So these are some of the factors which you must take into account before going for a business auto insurance.