Insurance agencies are small businesses that require just as much protection as the businesses they work with. Many insurance agents and claims adjusters work from an office, but just as many travel heavily for work.
Whether your agency offers company cars or allows employees to drive their own vehicles for work, your agents may need to be covered under additional commercial auto insurance. Personal auto insurance won’t necessarily cover your agents while they are using their vehicle for work purposes, which leaves your agency at risk for lawsuits and other damages in case of an accident.
Commercial Auto Insurance Coverage
As you may know, most commercial auto insurance policies include similar coverage to personal auto insurance, including:
- Comprehensive Coverage: Comprehensive coverage provides compensation for damages to the vehicle caused by fire, wind, hail, lightning, smoke, falling objects, theft, vandalism and more.
- Collision Coverage: Collision coverage provides compensation for damages to the vehicle caused by a collision with another vehicle or object.
- Liability: Liability insurance covers bodily injury and property damage the driver may cause someone else while operating the insured vehicle.
- Medical Payments Coverage: This insurance covers medical bills the driver and their passengers may face after an accident, no matter who caused the accident.
- Uninsured/Underinsured Motorist: This insurance covers damages related to an accident with another driver who is not carrying insurance.
A particularly useful coverage for insurance agencies that can be added to a commercial auto insurance policy is Hired or Non-Owned Auto. This insurance covers vehicles borrowed or rented by a business, such as employee vehicles. If your insurance agents use their personal vehicles to travel between clients, this insurance can cover accidents they are involved in on behalf of your agency.
How Commercial Auto Insurance Works for Insurance Agencies
Most insurance agencies operate similarly to other small businesses. The owner of the insurance agency may purchase a commercial auto insurance policy to cover the employee vehicles or agency vehicles used by the business. As long as the policy is active, anyone who is given permission to operate the insured vehicles should be covered.
In some cases, you may choose to have a named policy. A named policy allows you to name specific employees for full coverage on your commercial auto insurance policy. For example, if only three of your key employees will be using work vehicles, you may want to include them on your policy.
Keep in mind that adding individuals to a policy can affect the cost of insurance premiums. Your agents’ driving records and credit scores can all have an impact on the rate of your agency’s commercial auto insurance. If you have employees that have poor driving records or low credit, you may want to think twice about allowing them to drive for your business.
Commercial auto insurance won’t just cover the vehicles and those inside, however. Any accident made in a company car could fall back on your agency. For example, say one of your employees gets in an accident while driving a client to lunch. The client is severely injured in the accident and rushed to the hospital. That client may then sue your employee or even your business for their medical injuries. Commercial auto insurance can cover the victim’s medical bills as well as protect your agency from expenses in case of a lawsuit, such as court fees, defense costs, settlement costs and more.
Commercial Auto Insurance Requirements
Insurance agencies aren’t necessarily required by law to carry or offer commercial auto insurance. However, car insurance is legally required in different states. Texas vehicles are required to have at least:
- $30,000 in bodily injury liability per person
- $60,000 in bodily injury liability per accident
- $25,000 in property damage liability
If employees are performing any work on the road for your agency, make sure they are covered. Contrary to popular belief, commercial auto insurance does cover limited personal use. This means that even if your agents are off the clock, they may still be covered for an accident under the agency’s commercial auto insurance policy.
Carefully evaluate your insurance agency’s risks when it comes to travel and commercial vehicles. Insurance agents need just as much insurance protection as other professionals in different industries, so consider investing in a commercial auto insurance policy to protect your assets, employees and clients.
Also Read: Things to Remember When Selling Commercial Auto Insurance