Do you operate a business from your home? If so, you have likely arranged for proper coverage to protect your property, such as business equipment and furnishings that you use for business purposes.

Hopefully, you have also taken care of your premises' liability, which consists of protection for injury to business visitors or property damage that is directly related to your in-home operations.

However, your business likely extends beyond your home with the use of cars, vans, trucks, etc. What about losses caused by vehicles? Do you have the proper protection?

It can be difficult to determine when you need to switch from a personal to a business auto policy. First, consider how your vehicle is used. If there's no difference between how you use your car for your business and how you use your car personally, then you may be safe relying on the protection of your personal auto policy. However, you should take a close look at precisely the type of vehicle you use, and exactly how you use that vehicle. Both personal and business insurance policies use defining features, such as weight, to determine the type of vehicles eligible for coverage. For example, many personal policies do not cover vehicles weighing over 10,000 pounds. However, regardless of the vehicle's weight, the main consideration is the vehicle's use.

Primary Vehicle Use
To commute to work and for personal travel

Appropriate Policy
Personal Auto Policy

Primary Vehicle Use
To deliver packages between home and businesses or customers

Appropriate Policy
Business Auto Policy

Primary Vehicle Use
To carry persons for hire via smartphone applications

Appropriate Policy
Combination of Personal and Business Auto Coverage, often supplemented with the application's Commercial Auto coverage.

Key questions are used to determine what kind of policy is needed for a home-based business, such as:

  • Does anyone use a car regularly to go to homes or businesses of clients?
  • Does anyone travel to perform demonstrations of a product or service?
  • Does any vehicle have signage on its exterior that displays the company's name, contact contact information, etc.?
  • Is any vehicle owned in the name of a business entity?

There are other important considerations as well. If you borrow or rent a vehicle to move business equipment, you won't have coverage under a personal auto policy. Business use of non-owned pickup trucks, vans, or similar vehicles such as SUVs and hybrids are also excluded. Home-based business owners should also be aware that a problem arises when renting a vehicle while on a business trip. A personal auto policy only provides limited coverage under narrow circumstances.

If you have any doubt about your coverage, seek the advice of the trusted insurance professionals at Williams Insurance Fullerton to examine your business and vehicle use. With over 80 years of expertise, you can trust us to guide you in the right direction.


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