5 Things Business Car Insurance Covers (And What It Doesn’t) Policies
If your business relies on vehicles to operate, whether for deliveries, transportation, or on-the-road services, business car insurance is your safety net. A single accident without coverage could result in huge out-of-pocket expenses that many small businesses simply can’t afford. But what does this insurance actually cover, and what does it leave out?
Understanding how this coverage applies to different scenarios can protect your business from unexpected costs and potential legal trouble. Let’s break down the essentials of business car insurance, including five key things it covers and a few things it doesn’t.
What Does Business Car Insurance Cover?
The average cost of an auto liability claim for bodily injury in 2022 was $20,235. With the rising costs of medical care and vehicle repairs, having the right insurance coverage is crucial for businesses that use vehicles. Here are five things that your car insurance typically covers—along with some scenario-based examples to illustrate how each type of coverage works.
1. Accidents and Damages
One of the primary benefits of business car insurance is coverage for accidents involving your vehicles. Whether it’s your fault or the other driver’s, having insurance ensures you’re not stuck paying out-of-pocket for repairs or legal expenses. This includes liability for damage to third-party property or injuries caused to others.
Scenario: Imagine one of your delivery drivers accidentally rear-ends another car during rush hour traffic. Without insurance, vehicle repair bills and medical costs could fall entirely on your business.
2. Employee Drivers
If your employees are using company vehicles for business activities, they’re typically covered under your policy. This ensures that your workers can drive with peace of mind, knowing they’re protected in case of an accident.
Scenario: An employee tasked with client visits scratches the company car while parked. Business car insurance will cover the repair costs for the damages, keeping your operations running smoothly.
3. Vehicle Theft or Vandalism
If a business vehicle is stolen or vandalized, insurance can cover the financial loss. This is especially valuable for businesses operating in high-risk areas.
Scenario: If a company van loaded with products is stolen, your insurance can compensate for the loss, allowing you to recover quickly instead of halting your operations.
4. Weather Damage
From hailstorms to floods, natural disasters can severely damage your business vehicles. Business car insurance policies often include comprehensive coverage for weather-related damages.
Scenario: A severe storm causes a tree to fall on your company vehicle. Insurance ensures the repair costs don’t derail your budget.
5. Cargo and Equipment
If your vehicles are transporting goods, materials, or specialized equipment, certain business car insurance policies can cover these assets in the event of accidents or theft.
Scenario: A catering business transporting food to an event experiences a sudden collision, damaging the cargo in transit. Insurance can help cover the costs of the ruined goods.
What Doesn’t Business Car Insurance Cover?
While business car insurance offers essential coverage, it’s equally important to know what’s excluded to avoid surprises.
1. Personal Use of Company Vehicles
Business car insurance is strictly for company-related activities. If a vehicle is being used for personal errands and an accident occurs, the policy likely won’t cover it, making it important to have clear policies defining personal vs. professional use to avoid complications.
2. Unauthorized Drivers
Drivers not explicitly listed on your insurance policy may not be covered. If an unauthorized person drives your vehicle and gets into an accident, your claim could be denied.
3. Regular Wear and Tear
Normal wear and tear—like tire replacements, oil changes, or brake repairs—aren’t covered under this type of insurance. These are considered routine maintenance costs that you’ll need to handle separately.
4. Intentional Damage
Any damage caused intentionally by your drivers will not be covered. This includes reckless or illegal behavior that results in an accident.
5. Driver Negligence Due to Lack of Licensing
If an accident involves a driver with an invalid or expired license, the claim may be rejected. Always ensure your drivers are properly licensed and trained.
Protect Your Business with Bethany Insurance
Don’t leave your business vulnerable to the unexpected. At Bethany Insurance, we specialize in providing tailored business car insurance solutions to fit your unique needs. Our team will work with you to create a policy that provides maximum protection so you can focus on running your business smoothly.
Give us a call today to discover how affordable and effective the right insurance can be. Protect your business, your team, and your future today.
