Don’t overlook your client's need for commercial auto insurance

When it comes to discussing insurance coverage with your small business clients, commercial auto insurance may not be at the top of your list of priorities. Owning company vehicles was once something only large-scale businesses had the capacity for. However, that’s no longer the case. These days, plenty of small to medium-sized business owners operate at least one vehicle on a daily basis. And sometimes, especially for small business owners, determining whether their vehicle qualifies as personal or commercial isn’t obvious. 

As an independent insurance agent, it’s your job to understand the risks your small business clients are susceptible to, and to help them find the right coverage for those risks. In fact, you likely did just that when you helped them choose things like a workers’ compensation policy or a general liability policy.  

But what about your small business clients whose services include driving passengers to and from destinations or using a special vehicle to haul heavy equipment to a worksite? These clients assume an additional level of risk, and you can help them stay protected while on the road with a commercial auto insurance policy.

What is commercial auto insurance?

Commercial auto insurance is a type of business insurance that covers any cars, trucks, vans, or other vehicles used for conducting business. 

This insurance provides additional coverage for situations and use cases that personal auto insurance policies don’t cover, such as when someone other than the vehicle owner drives the vehicle for commercial purposes.  

Commercial auto insurance typically covers:  

  • Liability damages 
  • Collision damages 
  • Comprehensive physical damage 
  • Medical expenses 
  • Uninsured or underinsured motorists 

Which industries commonly need commercial auto insurance?

If your client or their employees use one or more vehicles to run their business, they need commercial auto coverage. While a business in just about any industry could require commercial auto insurance, let’s go over three of the more common industries within which business owners will want to consider their need for commercial auto insurance.

Real estate

At first glance, it may seem odd that real estate made this list. However, it’s not as strange when you remember real estate agents are constantly driving themselves and their clients to visit different properties. Because driving passengers to and from showings is such a large part of a real estate agent’s job, in the event of an accident, a personal auto insurance policy may not be enough to cover things like medical and legal costs.  

In fact, many personal auto insurance policies will deny coverage if the accident occurred while using a personal vehicle for commercial use. That’s why having a commercial auto policy in place is essential for anyone driving around clients as much as a realtor does.

Construction

Your construction clients’ daily tasks may include operating large vehicles, transporting tools and equipment, and sending employees out to pick up supplies. Each of these activities leaves construction businesses open to a high level of risk. Without commercial auto insurance, an accident could cost your construction clients thousands in repairs, injuries, and liability. 

Specialty trade contractor

This category includes plumbers, roofers, electricians, house cleaners, and more. Basically, any type of contractor whose job involves traveling to a customer’s house or place of business to provide on-site services. Often, contractors drive a normal car or truck, but sometimes the work requires a special vehicle to haul heavy equipment to and from the job site. These vehicles are an essential asset to your client’s small business and should be protected with a commercial auto insurance policy. 

What to consider when discussing commercial auto insurance with your clients

Whether your clients are in one of these three industries or not, if they use one or more vehicles to run their business, it’s crucial they have a commercial auto policy. As an independent agent, you can help your clients understand their risk and ensure they have the correct coverage, but there are a few things to keep in mind.

Legal requirements

Nearly all states require any licensed driver to have a personal auto insurance policy with a specific minimum amount of coverage. However, when it comes to commercial drivers, some states legally require additional protection. Additional coverage requirements could include a higher amount of liability or damage protection.  

As you advise your small business clients on their commercial auto insurance needs, be sure to adhere to any legal requirements first. Once you’ve established the minimum level of protection required by law, you can discuss extending the policy to include additional coverage. 

Insuring multiple vehicles and drivers

Nearly all states require any licensed driver to have a personal auto insurance policy with a specific minimum amount of coverage. However, when it comes to commercial drivers, some states legally require additional protection. Additional coverage requirements could include a higher amount of liability or damage protection.  

As you advise your small business clients on their commercial auto insurance needs, be sure to adhere to any legal requirements first. Once you’ve established the minimum level of protection required by law, you can discuss extending the policy to include additional coverage. 

Help your clients protect their business while on the road

From transporting customers to hauling equipment, even the safest drivers can find themselves in circumstances outside their control. Make sure your clients are protected when they hit the road by helping them find the best commercial auto insurance coverage for their business’s unique needs. 

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