The transportation industry is very diverse, and new business models are popping up every day. Traditional taxi and limo companies are now in competition with Lyft and Uber, and giants like UPS are being challenged by small, independent delivery firms. Nonetheless, one constant for any business that uses motor vehicles in its normal operations is a certain degree of additional risk.
Whether you own a fleet of taxicabs, a moving and storage company or a small flower shop that delivers to residents in your town, you need a solid and well-thought-out insurance program to manage your risk. Although every business is different, here’s a brief overview of the types of coverage most firms that transport goods or people will need.
Commercial Automobile Insurance
Whenever you get behind the wheel of an automobile, you run the risk of getting in a wreck. So if you run a business that uses a car, van or truck on a regular basis, your risk of getting in a costly accident is extremely high.
Imagine, for example, that your employee is driving a delivery van for your company and swerves to avoid a dog in the road. He veers into the oncoming lane of traffic and crashes into another car, damaging the vehicle and injuring the driver of the other car. Because your employee is driving a vehicle your business owns, your company is liable for the loss.
Commercial automobile insurance will protect your business assets in situations such as this. Depending on the policy you’ve chosen, it will cover:
- Medical costs for your driver; any passengers in the vehicle; the driver of and any passengers in the other car.
- Repair costs for both cars
- Legal expenses, such as attorney’s fees, settlements, judgments, and other court expenses if the driver of the other car decides to sue.
Who Is Eligible for Commercial Auto Insurance?
Any business that uses company-owned motor vehicles as part of its normal operations should purchase commercial automobile insurance. The types of vehicles covered include:
- Tow trucks
- Passenger vehicles
- Limousines & shuttle busses
- Delivery vans
- Dump trucks
- Moving trucks
Ask your Carmoon Group agent about coverage for your specific operations and the policy limits you will need.
Hired and Non-owned Vehicles Coverage
Not every small business owns a company car or fleet of cars. In fact, many companies ask their employees to use their own cars for work or rent additional vehicles to meet increased demands at certain times of year.
Say, for example, you own a small restaurant and catering business that occasionally delivers meals to customers around town. You can’t justify the expense of a dedicated delivery vehicle, so you ask one of your employees to make a delivery in his own car. The employee gets lost, and while looking at his phone for directions, plows into the rear end of another car.
The employee is driving his own car, so the damage to the other vehicle is covered by his personal automobile insurance: Right?
No, it’s not. Because your employee was working for you at the time of the accident, your business is responsible for any damages, even though he was not driving a company-owned car. What’s more, even if you have commercial auto insurance on your own vehicle, that policy does not apply to a car owned by an employee. That’s where Hired and Non-owned Vehicles coverage comes in.
Hired and Non-owned Vehicles coverage will pay for medical expenses, property damage and any legal expenses if an employee is involved in an accident while using his personal or rented vehicle when working for your firm. Usually purchased as a rider to your General Liability insurance, it can also be added as stand-alone coverage. Speak to your Carmoon Group agent about which option is best for your firm.
Tip: Hired and Non-owned Vehicles coverage does not cover employees who are driving their own cars to and from work.
General Liability Insurance
Commercial automobile insurance provides liability coverage if your or an employee is involved in a car wreck, but not every risk associated with your business is going to involve a car. Suppose, for example, a client stops by your office to discuss renting several limousines for an upcoming wedding, and trips over a frayed rug, breaking his arm. As the owner of the business, you are responsible for paying for his medical care.
General liability insurance is designed to cover third party bodily injury and property damage claims, including accidents such as trips and falls. It will pay for your client’s emergency medical care, including an ambulance to take him to the hospital, his emergency room visit and any subsequent medical bills. Additionally, if the client were to sue you for compensatory damages (such as lost wages or pain and suffering) it will pay your legal expenses, such as attorney’s fees, court costs and any monetary judgement awarded by the court.
General liability insurance covers property damage claims as well. So if the above client broke an expensive pair of eyeglasses when he fell in your office, the insurance would pay to repair or replace them, too.
If your business has employees, chances are that you’re required by your state to carry Worker’s Compensation insurance to protect them if they are injured on the job. Say, for example, one of your limo drivers is involved in a five car pile-up on the freeway. He is badly injured, spends a month in the hospital and cannot return to work for six months. Your Commercial Automobile Insurance would pick up his medical expenses, but it would not pay his lost wages; nor would it pay for job retraining if he was unable to return to his former job.
Worker’s Compensation is no-fault insurance that provides important protections for any employee who is injured at work. It will pay for emergency medical care, long-term rehabilitation costs, job retraining and a portion of the worker’s wages until he can return to work.
Additionally, Worker’s Compensation insurance provides protection for you in the event you are sued by an injured employee. Imagine if the taxi driver in the above example said his accident was the result of faulty brakes that you were aware of and failed to repair? He might sue you for several hundred thousand dollars or more for his lost wages and pain and suffering. In the unfortunate event he died from his injuries, his survivors could also sue you for wrongful death.
Fortunately, most workers compensation insurance policies include Employer’s Liability Insurance, which will cover your legal fees and any monetary judgements in the event you are sued by an injured employee. Not all policies include this type of coverage, however, so make sure to talk to your Carmoon Group agent to determine exactly what you have in place.
Tip: State laws on which employers need to purchase Worker’s Compensation insurance vary considerably. Consult this easy-to-read chart from the National Federation of Independent Businesses to get an overview of the law in your state.
Commercial Umbrella Insurance
Like all insurance policies, Commercial Automobile, General Liability and Employer’s Liability policies are limited in the amount of coverage they provide. And though it’s possible to increase the limits on most policies, those increases usually come at a hefty price. And that’s where Commercial Umbrella insurance comes in.
Commercial Umbrella insurance is also called Excess Liability coverage, because it increases the liability limits of policies you already have. Typically purchased in $1 million increments, it allows you to increase the policy limits on your General Liability, Commercial Automobile and Employment Liability policies for one affordable rate.