Believe it or not, there are more than 680,000 construction companies operating in the United States alone. And each one of those companies relies on countless pieces of equipment, vehicles, and work trucks to get the job done right.
Unfortunately, even the best business insurance policy won’t protect your vehicles when they’re on the road. Only auto insurance policies can do that.
But should you rely on your personal car insurance coverage to protect your work vehicles? Absolutely not!
Here’s why every construction business needs a good commercial auto insurance policy to protect their business’s fleet.
Protects You from Liability
All auto insurance policies have to provide some degree of liability coverage. This helps protect you from damages relating to lawsuits from accidents you’re responsible for.
But there’s more to liability than getting involved in accidents.
When you run a construction business, you’re working on other peoples’ property. And if you damage that property with one of your vehicles, you’re liable for the damages. Commercial insurance makes sure those damages get covered without you paying out-of-pocket.
Think of it as supplemental liability coverage for your company. Your business insurance policy may not cover damage done by your company’s vehicles, but with commercial auto insurance, you’ll be completely covered.
Covers More Than the Vehicles Themselves
How often do you drive an empty work truck or van to a job site? Not very often, right?
You have tools, materials, and other equipment in the back. And those things cost money. Unfortunately, those items aren’t covered by your personal auto insurance policy.
After all, they’re not your personal belongings—they’re the property of the business. If they get damaged or lost, you have to pay the full price for repairs and replacement.
But commercial auto insurance covers those items completely. If they’re damaged, your insurance provider will help cover the cost of replacements once you file a claim.
Just remember to evaluate your coverage limits. If you frequently haul high-cost items, you’ll want to invest in a higher coverage limit. Otherwise, you’ll still have to pay out-of-pocket to cover the cost of replacements.
Protects Your Team
Personal auto insurance protects you and any driver named on the policy when they’re behind the wheel. It won’t protect your employees and contract workers if they use your vehicle.
If they’re involved in an accident, their personal insurance may help cover the damages. But you could still be partially at fault for the accident. After all, you loaned them the vehicle in the first place.
Commercial insurance allows your employees and anyone working for you to use the equipment and vehicles as needed. You don’t have to name each employee on the policy for it to take effect.
If they’re involved in an accident, the policy covers the damage to the other drivers’ vehicles as well as the damage to your company fleet. All you’ll need to do is file a claim with the provider.
Helps You Maintain Equipment Leases
Owning your entire fleet of construction equipment may not be feasible. Instead, many construction companies choose to lease both equipment, work trucks, vans, and other vehicles.
Each lease is different. But since you don’t own the equipment outright, you’re expected to fulfill any requirements stipulated in the lease agreement.
In most cases, lease agreements specify the type of insurance you must have in place. If you don’t insure your leased vehicles, the lessor can take the vehicles back. This is because they own the vehicles and want to make sure they’re properly looked after.
Commercial insurance protects the lessor from financial loss if the vehicle gets damaged or destroyed while you’re using it. Without the coverage, they may not get the full value of the vehicle back.
The lessor can require you to have insurance in the first place, but they can also detail the minimum coverage amounts you have to buy. This can change how much the policy will cost. Visit this useful page for more information.
Personal Insurance Doesn’t Cover Work Vehicles
Personal auto insurance policies do one thing very well. They protect you and your personal vehicle on the road.
They’re not designed to cover commercial vehicles. Worse, if you’re using your personal car for business and get in an accident, they might not cover you at all.
This is because driving for business purposes exposes you to different levels of risk. You could have clients in the car or might haul expensive gear and tools. These risks aren’t what your insurance provider agreed to when issuing you the policy.
But when you invest in commercial insurance, you’re covered behind the wheel no matter how often you drive for business purposes. And you’ll have access to higher coverage limits to further protect your business’s assets.
Why Higher Coverage Limits Matter
Personal insurance limits are typically lower than commercial limits. And if you rely on the coverage for business-related driving, you might end up being underinsured.
Remember, your insurance policy only covers you up to the limit of the policy. If it’s not high enough, you’re stuck paying for the rest out-of-pocket.
Since commercial policies offer higher coverage limits, you’re better equipped to handle accidents and damage without dipping into your savings.
Take Care of Your Construction Equipment
Your work vehicles make getting your job done far easier. But that means you’ll want to protect them whenever possible.
A great commercial auto policy is an absolute must for any construction business. But that’s not the only way to look after your interests.
Check out our recent posts for more helpful tips and tricks for running your construction business.