Small Business Motor Insurance

Motor Insurance

If your small business requires the use of vehicles to operate, then getting yourself informed about motor insurance is a must.

You need to know about:

The different types of coverage

Prices for each coverage package and how it’s calculated

Keeping yourself informed will help you manage costs related to a vehicle purchase or rental and help you decide which form of insurance is beneficial for your business.

What Is Commercial Motor Insurance?

Motor insurances cover medical expenses, property damage, and legal bills if one of your business vehicles is involved in an accident. This is why motor insurance is vital, regardless of your company’s size. Of course, this is even more vital for small businesses because accidents can occur anytime, and they will incur expensive bills. You need coverage to protect your trucks, vans, cars, and other vehicles, and without insurance, you might need to dig into company funds to cover damages and fees. Losing your work vehicle could also cause downtime and ruin your company financially.

State regulations in many countries require small businesses with business vehicles to carry motor insurance. If you are in the US, comparing insurances offered by different providers is a good idea. The same principle applies to any country you operate in. For instance, if you have an office in Thailand, it’s always good practice to compare car insurance in Thailand before you sign up for one.

What does commercial motor insurance cover?

Almost all motor insurances cover an accident’s property damage and medical payments. Specific premium coverage policies also cover legal expenses if you are sued. Some policies cover theft, vandalism, and if your employee gets into an accident.

The coverage provided by commercial motor insurance is not the same as the ones for personal vehicles. Commercial motor insurance policies usually come with higher coverage limits due to work-related risks, whereas private motor insurances provide coverage related to daily commuting.

Commercial motor insurance coverage usually starts between $500,000 to $1,000,000.

This is why you should not take personal motor insurance to cover commercial vehicles, even though private motor insurances are significantly cheaper.

You can also take hired and non-owned auto insurance (HNOA) if your employees drive personal vehicles for business purposes. This way, the insurance provides liability coverage for the cars that your company uses but does not own.

What factors determine the costs of commercial motor insurance?

Commercial auto insurance costs between $130 to $150 per month. A commercial motor insurance policy will also defer depending on the factors and items you want to be covered in your policy. Some of these factors are:

  • Vehicle types
  • Employee driving records
  • Number of vehicles
  • Type of risk involved
  • History of claims
  • Policy deductible

What Types of Coverage Are Available to Small Business Owners?

Like all other insurance companies and policies, small business owners have various choices, each with its limits and types of coverage. There are a few items that you must ensure you have in your coverage, and these are:

Liability insurance

Most business owners include this type of coverage in their insurance, and some states and countries make this a mandatory element. Liability insurance protects other people if your work vehicle causes an accident. The coverage covers bodily injury, which pays for medical bills and related expenses, and property damage, which covers the cost of damages and repairs to the other vehicle and repairs and damages to buildings.

Medical payments

As the name goes, this coverage pays formedical care and related expenses for your employees and their passengers. The coverage limit depends on your policy, so check with your agent what medical bills are covered and what are not. It’s also helpful to take note of the kind of risks usually associated with the type of business you run. This way, you can speak to your agent and ensure that it’s added to the policy.

Physical damage insurance

This type of coverage protects your work vehicle and can prevent losses. This is a valuable item to add to your policy because if you lease your vehicle or are still paying it off, this insurance can help cover the costs. You can also add coverage related to weather-related incidents and vandalism if you notice that these factors are one of your most common business risks. Another item to consider is collision damage protection which offers protection when a vehicle hits another object or is damaged from overturning.

Uninsured or underinsured motorist

This policy covers the damage associated with an accident caused by an uninsured or underinsured motorist with your work vehicle. Even if you did not cause the accident, you might end up paying the bill. With this coverage, your costs are covered.

Business Owner Policy

Also known as BOP, this policy covers various types of coverage into a single procedure. You get property and commercial general liability coverage and other small umbrella coverage for businesses. A BOP often helps the small business owner save money on all premiums. Through a BOP, you can determine the coverage limit of your policy based on your business needs. You’ll also know how much you need to pay either on a monthly, yearly or bi-annual basis.

Suppose you operate a business that places your drivers at a greater risk for accidents or suffering damage to the company vehicle. In that case, you might purchase a policy with a larger limit.

What Don’t Small Business Auto Insurance Policies Cover?

When sourcing motor insurance for your small business, remember to ask your agent if you are unsure of specific terminology or have concerns about your coverage. Not all motor insurance policies provide the same range- some won’t cover particular incidents such as:

  • Accidents that happen while committing a crime
  • Damage incurred from moving company vehicles
  • Damage incurred during civil disorders

The bottom line is motor insurances are crucial for small businesses as it helps protect your company and its employees when accidents happen. The coverage it offers helps provide your employees with the necessary medical care and financial assistance for your company. Your business will not be exposed to unprecedented risks with the proper coverage.


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