When you purchase commercial auto insurance, your first thought may be how much it will cost. However, it is also important to know who your policy will cover.
In general, most employees should be covered under your business’ commercial auto insurance policy. There are three categories of insureds when it comes to commercial auto insurance.
Policyholder: The policyholder, which is typically the business owner, will automatically be named and covered under a commercial auto insurance policy. This means you can operate any vehicle on the policy and be covered.
Permissive Drivers: Permissive drivers are simply drivers that have permission from you to operate the vehicle. If you allow employees to operate your vehicles, they will be covered under commercial auto insurance.
Omnibus Insureds: Omnibus insureds refers to those who are liable for the conduct of the driver (policyholder or permissible) and may face financial or legal consequences for accidents.
Who Should Be Driving Your Commercial Vehicles?
While those you allow to drive the company vehicles should be covered, you should be careful about who you should let drive the vehicles. When you allow your drivers to operate the vehicles, any accidents they are involved in can fall back on your business, both liability and financial-wise. Be sure to vet your potential drivers for driving record and credit score to ensure that you are hiring dependable employees.
This is also important because other drivers can influence the cost of your commercial auto insurance rates. Even a single at fault accident can cause your premiums to jump by 30% or more.
When an accident does occur, it is crucial to file a claim as soon as possible so that everyone involved can receive the compensation when needed.
Does Commercial Auto Insurance Cover Personal Use?
Commercial auto insurance can cover personal use in certain circumstances. If your business provides employees with company cars, for example, most of their personal use will also be covered along with business use. The few exceptions include if the vehicle is more of a personal vehicle than a work vehicle or if the vehicle is being used for criminal acts at the time of the accident.
Employees should always know the proper safety precautions when operating a business vehicle and what to do if they are involved in a car accident—including seeking medical attention and contacting their major immediately.
If you own a business that needs commercial auto insurance, be sure to shop around and speak with an insurance agent about your coverage options.