It is important for business owners to invest in commercial car insurance if they have a vehicle they use for work purposes. Commercial car insurance will protect them from damage to their car and legal liability. Listed below are some reasons to buy commercial car insurance.
1. A Vehicle Used for Commercial Purposes Will Not be Covered by Private Insurance
Many people do not buy commercial insurance as it is more expensive than the insurance they have on their own vehicle at home. Instead they insure their car with private insurance as they do not see the need for paying extra to cover it commercially.
What these people fail to understand is if they need to make a claim on their commercial vehicle and it only has private insurance, the claim will be declined. The insurance company will state that they were unaware that the car was being used for commercial purposes and withholding this information makes the policy null and void. This will leave the customer out of pocket.
2. Commercial Insurance Covers Legal Liability and Damage to the Vehicle
What many people are unaware of is that a car crash has the potential to bankrupt somebody. If a vehicle hits a power pole they could be sued by all the businesses that were out of power as a result of the accident. The damages could include loss of wages, loss of sales and a number of other things. Thankfully commercial car insurance will cover the legal liability of the business.
The policy will also cover any damage to the company vehicle and other vehicles that were damaged as a result of an accident that was the fault of the employee driving the company car.
3. The Company is Responsible for the Actions of the Employee
When an employee is driving a company vehicle the company is still responsible for his or her well-being. If the employee gets into an accident and the business does not have commercial car insurance they will be liable for damages.
If this situation occurs and there is not a current commercial insurance policy on the vehicle the company will be responsible for a large settlement figure. Smaller companies will find that they may not have enough money to cover this which will lead to the company going into receivership.
Commercial car insurance is a necessary evil for businesses. Without it they will be paying a significant amount of money in reparations in the event of an accident.