It’s important to make the right insurance choices since they can have a significant impact on your operational costs as a small business owner. Hence, we would like to offer some basic tips to small businesses for purchasing or updating their New Jersey commercial auto insurance coverage.
It’s a well-known fact that all motorized vehicles, whether used for personal or business purposes, need to be covered by an auto insurance policy. Automobile liability insurance covers medical expenses for injured persons and damages to the property of other individuals as a result of a motor vehicle accident caused by the insured’s negligence.
The types of coverage provided by personal and commercial auto insurance policies are essentially the same, however there are some important distinctions. Typically, a commercial auto insurance policy will provide higher liability limits, for example $1 million dollars in coverage. They also may have provisions that cover rented and other non-owned vehicles, including in some cases, employees’ cars driven for company business.
Determining whether a personal or commercial policy is appropriate is based upon several factors related to ownership and the use of the vehicles. This is dependent upon who owns or leases the vehicle, individually owned or the business as an entity; who drives the vehicle, the owner or employees, and just how the vehicle is principally used (for example, transporting people, delivering packages or carrying hazardous materials).
Commercial auto insurance can cover a combination of vehicle types (trucks, cars) and drivers, as well as some different types of motorized equipment. It provides for bodily injury liability and property damage while operating a company automobile, medical payments or Personal Injury Protection (PIP) for the driver and passengers of the policyholder’s car. Injuries or damage to someone else are also covered as well.
Hired/Non-owned auto liability concerns
If you are renting cars or your employees are using their own vehicles then this particular policy provides business insurance coverage for certain liabilities arising from the use of a rented or leased vehicle (hired), or a non-owned vehicle that is used for company business. Oftentimes this coverage can be added, at little added expense, to a business auto policy, or in some cases, a general liability policy.
Use of personal vehicles is generally a risky proposition, and employees who use their own personal cars for business purposes risk the likelihood that their insurer will not cover any damages sustained while using their personal auto for work-related purposes. Speak to an agent about any questions pertaining to New Jersey commercial auto insurance and your company’s needs.