One of the best things you can do for your home-based business is to ensure you have adequate insurance coverage. If you do most of your work online and only use your personal vehicle sparingly for work-related tasks, then it may not be necessary for you to purchase commercial auto insurance. However, if any of these three things happen in your business, then you'll want to pay the extra money to get a commercial auto policy that will protect you in case there is an accident.
You Hire Employees
If your business expands to the point that you need to hire employees to help, then you may want to upgrade your personal auto insurance to a commercial policy. This is because you could be held liable for any damages your employee causes if he or she gets into an accident while running work-related errands (e.g., picking up office supplies).
A personal auto insurance policy will only cover employees if they are driving your vehicle at the time the accident occurs. However, a commercial policy will cover employees even if they are driving their own vehicles. Having commercial insurance in this case can protect you from having to pay out of pocket if your employee is found liable for causing the accident with a third party.
You Begin Transporting People
Another reason you may want to switch to commercial auto insurance is if you start transporting people in your personal vehicle. For instance, say you are a freelance graphic designer, and you decide to earn extra money by signing up as an Uber ridesharing driver. This company only requires you to have personal auto insurance for this particular driving job.
However, you'll want to get commercial insurance as well because this type of coverage typically has higher limits than personal insurance. If you get into an accident, you may be sued by the other driver and your passenger, and commercial insurance will ensure you have enough money to cover this.
Additionally, your personal auto insurance policy may not cover business use of your personal vehicle, so you may have to get commercial insurance anyway. It's best to read the fine print on your policy or contact your insurance company to determine if this is the case and then make the appropriate choice if it is.
You Buy a Company Vehicle
If your home-based business company expands to the point that you need a dedicated company vehicle to handle business-related tasks, then you'll definitely want to get commercial insurance. For example, you expand your freelance graphic design business to include creating and installing signs and logos for local companies and you buy a van to help transport the materials and equipment. You'll want to opt for commercial insurance because it will typically cover the damage or loss of business assets such as equipment if it is destroyed in an accident. This is in addition to any damage caused to the vehicles and bodily harm to you or the other party.
Commercial insurance offers numerous other benefits besides protecting vehicles you or your employees may drive. This type of insurance will typically also cover you when you drive vehicles you don't own. For example, if you rent a vehicle for business use, the insurance policy will usually pay for damages if you or your employee(s) get into an accident while using it. The insurance may also cover trailers and reimburse you for vehicle rental fees you incur while waiting for your primary vehicle to be repaired. For more information on how commercial auto insurance can benefit your home-based business and the best time to invest in it, contact an auto insurance company.