You need commercial auto coverage if you or your employees will use
titled vehicles in their work. Many small-business owners believe
that if their car is in their personal name then commercial coverage
is not necessary and their personal auto policy will cover the auto.
This is not true. Most personal auto policies exclude from coverage
the use of a vehicle for commercial purposes.
Now, it is true that
the exclusion applies if the vehicle is being used primarily for
commercial purposes. And some ill-informed advisors/agents will
advise small-business owners that such a policy is not necessary.
The last thing you will
want to do is argue with your insurer over whether your automobile
was used more for personal use or business use. If you use any
titled vehicles in your business, then purchase this coverage. In my
opinion, the risk of a serious auto accident wiping out a small
business far exceeds the premiums paid for the coverage and this is
not the place to save premiums.
A commercial auto
policy does the same thing as your personal auto policy. It provides
coverage to repair or replace a vehicle damaged in an accident and
it will pay the claims of any third-party injured in the accident.
You should purchase
“non-owned auto” coverage as well. This coverage will provide
coverage to the business when employees use their personal vehicles
for the business. It will also provide coverage whenever the
business makes use of vehicles it does not own. This includes your
car when used for business purposes.