The U.S Small Business Administration (SBA) reported in 2012 that over 67% of all small businesses collapse within the first two years of launching. In another study, the organization found that 89% of these businesses have inadequate insurance coverage. Could there be a correlation between these two findings? Of course yes.
Insurance as a Fallback
You see, your startup business faces myriad challenges, and through different insurance policies, you buy protection against such risks. One of the most critical covers is commercial car insurance. Unfortunately, the Insurance Institute for Highway Safety (IIHS) says over 60% of small businesses are inadvertently failing to invest in such coverage to cut costs.
Well, you might feel like your personal car policy is adequate for that personal car that you use to carry your landscaping tools, but this is not so. In case of an accident, your personal auto insurance company will decline to pay damages rightfully based on the fact that the policy only covers social and commuter use of the car.
Look at another scenario; if you have a pizza joint and you mostly send one of your delivery guys in your car, that’s all good. But wait till an accident occurs and your insurance firm says your cover does not apply as you were transporting commercial goods.
This will simply devastate your business operations, especially where bodily injuries or property damages are involved. It is for this reason that http://cheapautoinsurance.netprovides a platform where you can get affordable commercial auto coverage quotes. At least you won’t have a reason to jeopardize your blossoming business.
Where Commercial Car Insurance Applies
You might feel like this is an extra cost, but you should always look at the worst case scenario. You have pumped a lot of money and energy into your business, however small it looks, but then an auto accident where one of your personal cars is involved can be debilitating financially.
Do you need this coverage? The answer is yes if your vehicles fit these situations:
- If they are leased or rented to others.
- If they deliver or pick up goods that are to be used commercially. Think of supplies, raw materials, and finished products in this case.
- Where your employees use your personal car occasionally for business errands.
- In cases where any of your vehicles is registered to a business, partnership or even corporation.
- Where equipment and gadgets used in your trade are fitted on the car including ladders and racks which support your business operations.
- If there are modifications such as kitchens on your vehicle which support your business.
Different insurers will have even more descriptions of situations necessitating commercial car insurance. Luckily, your agent will be at hand to elaborate on this and also explain different covers to suit your unique business needs.
The most important thing is to remember that in case of a claim, your insurance company will not pay when they investigate and find out the car was at that time on an errand associated with your business. Do you need commercial car insurance? If you are self-employed or you regularly use your personal car for business purposes, it is time to talk to your insurance company before it is too late.
Regie Newman is an auto insurance guru having worked in the industry as an underwriter, administrator and later in several managerial positions. He writes prolifically on matters insurance and shares them on established forums such as http://cheapautoinsurance.net.