If your employees drive their personal vehicles to work, your company risks assuming financial responsibility in the event of an accident. If you use a vehicle for your business, whether it's transporting supplies, delivering goods, or servicing customers, consider taking out commercial auto insurance. Business car insurance covers you and your employees when you use a company car or a personal car for business purposes. Texas law requires drivers to show that they can pay for the accidents they cause.
Most drivers do this when buying auto liability insurance. Liability insurance pays for the repair or replacement of the other driver's car or other damaged property, and pays for other people's medical expenses when you're at fault for an accident. If a vehicle is primarily used in business, there is likely to be no coverage in a personal auto policy. If you use your personal vehicle for work from time to time, your personal insurance company may be able to adapt your policy to reflect this use.
If the vehicle is owned by a business, there will be no coverage under a personal auto policy. It would be necessary to purchase a commercial auto policy. Most personal auto policies specifically exclude commercial use. If you have an accident while driving to work, your insurance company will likely deny your claim.
If your company has a large fleet of vehicles, over time it may be more expensive to insure the fleet against physical damage than to withhold the risk, that is, to pay for physical damage directly rather than with insurance (also known as self-insurance). The policies of these two different types of car insurance have significantly different payouts in the event of a car accident. When an auto liability lawsuit is filed against the insured company, in which the policy covers the loss, the insurer is obliged to defend the company or to settle the claim. If your personal car insurance doesn't cover the cost of personal injury or injury, the person can file a lawsuit against your company, which can put a financial strain on your company.
Like your personal auto insurance policy, your insurance company calculates your commercial vehicle insurance premiums based on several factors. This coverage generally exceeds the amount of payment that a personal auto insurance policy covers to protect the employee and the business owner. Employee personal auto policies will not cover the use of the company car, unless the car was specifically lent as a temporary replacement for the employee's car while it is not available. If your company is in any of these situations, consider taking out sufficient commercial auto insurance.
While you have car insurance for your personal vehicle, as required by most states, you'll also need car insurance for business. If you can't find a company that's willing to sell you a policy, you can get basic coverage through the Texas Auto Insurance Plan Association (TAIPA). Nearly all personal auto insurance policies specify that their insurance policies exclude “livery” or rental vehicles. If you don't own a car but lend it to yourself frequently, you can purchase a liability policy for people outside the owner that pays for damage and injuries you cause to others while driving a borrowed car.
Texas law requires insurance companies to charge fair, reasonable and appropriate rates for the risks they cover. Since personal car insurance does not pay medical expenses in the event of an accident while driving for business reasons, the commercial policy will help cover the costs of bodily injury and medical bills and, in the event of a fatal accident, cover the costs associated with the event. Generally, an insurance contract requires that the owner of the vehicle appear on the policy statements page as the “primary insured”. For example, if your car is 10 years old, the company will pay you the value of a 10-year-old used car.
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