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Commercial Auto Insurance Basics - Protect your business against accident liability

If you run a small business, it can be confusing to figure out whether you need commercial auto insurance instead of a personal policy. Many assume that the coverage in either policy is the same, but business insurance for vehicles is quite different from personal coverage.

At the same time, in certain situations it may be fine to just have a regular personal policy. It’s best to check with a Texas commercial auto insurance provider to find out what the liability rules are in your area to get the right coverage to protect your business, but there are some general guidelines that you can follow.

Generally, personal auto insurance is acceptable for business vehicles if:

  • You own the business as a sole proprietor
  • You have fewer than four vehicles
  • You only use the vehicles for business travel
  • The vehicles are in your name
  • You or a relative who lives with you are the only drivers of the vehicles
  • The weight of supplies and equipment you carry is under 500 pounds
  • You visit fewer than three job sites each day

Once you go beyond these basics, you’ll probably need commercial auto insurance to protect your business from liabilities caused by a vehicular accident. If your vehicles are owned by a corporation that is in your name, employees drive the vehicles, or they are used for transporting goods or people, they can’t be covered in a personal policy.

Commercial autos generally need higher liability coverage to protect a business. The maximum liability under commercial policies is usually $1,000,000 – much higher than personal coverage.

Commercial policies allow for coverage of equipment other than standard vehicles, unlimited weight and job site travel, and coverage for vehicles that you do not own outright. It also covers third parties like employees or contractors who drive your vehicles.

One of the most important elements of the commercial policy is the waiver of subrogation against a third party so that employees and drivers are not held liable for damages.

In some cases, even though a vehicle is used often for business, a personal policy is still permissible. Those in professions who regularly drive passengers around - like realtors, consultants, social workers, home health care aides and lawyers – can do so with only personal coverage.

Selling and delivering items for a part time job like Tupperware is also covered under a personal policy. There are limits to mileage and how often others are transported, so if in doubt it’s always best to check with a Texas commercial auto insurance provider to make sure you have the proper legal coverage.

In Katy, Fulshear, Brookshire, Sugar Land, Round Rock and Houston, Texas, your local insurance agency is the Katy Texas Insurance. Call 281.398.1010 or toll-free 1.877.952.1010 for help with your insurance needs.