Yes, it will… USUALLY.
Incidental business use of your private passenger auto, pickup or van is often (but not always) covered under most standard auto insurance policies.
But not all situations are the same. So let’s talk about some common scenarios, and then I’ll offer some general advice. (No guarantee of coverage is implied.)
Sally, the Realtor.
Sally (a fictional Sally), is a local realtor in Napa. She has a sedan that she uses primarily for personal use, like running errands and commuting to her office. She also occasionally drives prospective home buyers to look at houses for sale.
A personal auto policy may be right for her.
Accountants, consultants, and part-time salespeople often fall into this category.
Paul, the Drywall Contractor.
Paul (a fictional Paul), is a self-employed drywall contractor in Sonoma. He has a panel van that is specially equipped to carry drywall and his tools. He uses his van primarily to conduct his business. He also runs personal errands with his van. In a sense, Paul’s van is his business.
A personal auto policy is probably not right for him.
Many tradespeople and small business owners fall into this category.
When do you need a “commercial” auto policy?
You may need a business auto policy if any of the following apply:
- You use your vehicle primarily for business.
- You have employees who use your vehicle for work.
- Your vehicle is registered in your business name.
- Your vehicle is specially equipped for a trade (racks, hydraulic lifts, etc).
- You use your vehicle for any paid deliveries (pizza, newspapers, etc).
- You use your vehicle as a messenger service.
- You provide ridesharing as a paid service (like Uber).
If you own a business, you should still consider a commercial auto policy for added liability protection… even if your personal vehicle can be covered by a personal auto insurance policy.
Because commercial limits are generally higher- often a lot higher- and you may need that.
Imagine this: You’re running late to a meeting with an important client. You’re on a business call, and you get distracted. You cause a major accident where others are injured.
You get sued. Your personal auto policy pays out to its limits. Then the victims go after your company’s assets. After all, you were on company time doing company business when you caused their injuries. This is a situation where the higher limits of a commercial auto policy could possibly save you and your company from bankruptcy.
First, pull out your auto policy and read the exclusions section. Read it slowly, and highlight anything you don’t fully understand.
Next, talk to your agent and explain how you use your vehicle. Don’t leave out anything. Omitting something because you think it might “cause a problem” is a bad idea.
Finally, if you are self-employed, you should review your policy with your agent every year. As a business owner, you need to make sure you and your business are properly protected.
Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates helping clients with insurance needs for personal, commercial and business insurance. Bruce can be reached at 707-931-0186, firstname.lastname@example.org