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INDEPENDENT AND SELF-EMPLOYED CONTRACTORS: WHO NEEDS COMMERCIAL AUTO INSURANCE?

Updated: Apr 13


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Whether your operation is large or more modest, you’re probably hauling tools, supplies, and workers from site to site, day in and out. If an accident happens while you’re out on the road, will you be covered for any damages or injuries that result? Sure, you have auto insurance on your personal vehicle, but if you’re using it for work, you could find yourself without adequate support, right when you need it most.

Why Commercial Auto Insurance?

If you have business-owned vehicles that are strictly used for on-the-job activities, it stands to reason that you may already have a commercial vehicle policy. Most states mandate commercial insurance when vehicles meet these criteria:

  • used for business

  • commercial license plate or tag

  • registered as commercial

Insurance is all about covering risks, and the risks to folks who use their personal vehicles to travel around town are far different than contractors traveling from job to job. Instead of ballooning costs and coverages that most folks don’t need, commercial auto insurance is its own thing–makes sense, right? You’ll often even find clauses in your policy’s fineprint explaining that if you experience a loss (AKA accident or damage) in your personal vehicle while using it for work purposes, that loss will be excluded from your coverage.

What Does Commercial Auto Insurance Cover?

Commercial auto insurance covers the same sorts of things as your personal auto policy, plus some specific circumstances that you’re more likely to encounter on the job. Of course, as always, coverage can vary by provider and by location, so you’ll need to flesh out the details with your trusted Contractors by Zinc agent. But here’s a general run-down.

  • Bodily Injury: coverage for others who may be injured as a result of you or your employees being involved in an at-fault accident while using a commercial or company-owned vehicle; covers pedestrians, other drivers, and their passengers for medical expenses, loss of income, pain and suffering, or even funeral costs

  • Damage: collision coverage protects against damage from auto accidents, paying for repair or compensation for a total loss; comprehensive coverage protects against damage from weather, theft, fire, vandalism, and other non-collision causes

  • Legal Aid: financial and professional assistance to represent your business in court if a case is brought against you by a victim

Beyond these vital coverage components, you might also want to consider adding Uninsured and Underinsured Motorist Coverage to your package. This comes into play if you or your employees suffer loss or injury in an accident and the fault rests with the other driver, but perhaps they don’t have enough (or any) insurance. Uninsured and Underinsured Motorist Coverage is even required in some states.

How can you determine if your vehicles fit the bill and would benefit from having a commercial auto policy? Depending on your state, these basic criteria can help you to determine if you need a commercial auto policy:

  • The vehicle in question is owned, leased, or titled to your business name

  • The vehicle in question is owned, leased, or titled to your personal name, but is used for business purposes, driven by employees, or used to transport materials

  • The vehicle in question is a dump truck, box truck, other large truck, or a cargo or work van

  • The vehicle in question is a piece of business-owned mobile equipment that can be driven on public roads (i.e. backhoe or crane)

In general, commercial auto insurance covers common vehicle types that are used for business purposes: cars, SUVs, light trucks, and vans. From one car to a fleet of trucks, commercial auto policies can adjust to compensate for the risk you face out on the road.

Beyond Commercial Auto

Related to commercial auto coverage, but not quite the same thing, is inland marine coverage. If you routinely use large tools that are attached to your work vehicle–think ladder racks, large tool storage boxes, etc.–then you might be able to include these for coverage from loss under your commercial auto policy. That said, individual tools and materials aren’t usually covered here. But these are the things you’re hauling around in your vehicle every day, whether it’s a set of hand tools, or larger equipment.

For the risks you face from potential damage or theft while away from your place of business, inland marine insurance can offer protection for a contractors’ rented, leased, or owned equipment. Employees’ tools are also typically covered. If damage or theft causes a mess to clean up and make it necessary to rent equipment for a contracted job, inland marine can help you to pay for those costs.

Medical payments coverage is another one to consider. If, for whatever reason, employees don’t qualify for workers compensation or health insurance, medical payments coverage can step in to cover resulting medical payments or injury costs sustained by the vehicle driver or their passengers, regardless of fault. This option works in specific situations, so it’s good to chat us up to see if it could cover an otherwise unprotected gap in your current insurance policy.

We’ve established that commercial auto coverage is vital and given you a few other coverage options to look into, but there are plenty of other risks you face everyday that these policies won’t cover. We’re talking about general liability, workers compensation, errors and omissions, and cyber protection. Anything you do more than the average person is a risk, and every risk is worth covering.

Work With an Insurance Agency Who Gets You

Contractors by Zinc is just one of the family of brands that make up Zinc Insurance, and our aim is to use our experience to ward off risk at every turn. As a small business, we know what you’re up against, and what it takes to operate safely in the face of risk. We’re your neighborhood agency and we’re in the best position to help. Get in touch with us today to learn more about who we cover and get your free, personalized quote.



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This blog post does not provide insurance advice and is intended for information purposes only. It is not a substitute for professional insurance advice from a licensed representative. Never ignore professional insurance advice because of something you have read in this blog post. Contact your licensed representative if you have any questions about your insurance policy.

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