Without the right insurance, your company will be left vulnerable to a variety of financial risks that you may not be able to recover from. One of the most important types of policies available is commercial auto insurance. This provides higher liability limits than personal auto policies to ensure companies are fully protected in the event of an at-fault accident. Thus, if any part of your business involves driving, you have to determine if you need this kind of coverage. Here are a few factors that will help you decide.

How to Know When You Need Commercial Auto Insurance 

1. Type of Vehicle

One of the first considerations is the type of vehicle you and your employees drive. Certain vehicles cost more to repair or replace if they’re damaged or stolen and can cause significant loss in an accident.

These include utility and delivery vans, flatbeds, limousines, dump trucks, and moving trucks. Vehicles that specifically fall into categories such as these will need commercial auto insurance. However, keep in mind that any vehicle can require coverage if it’s used to conduct business. 

2. Use

Pay close attention to what the vehicle is being used for, as this is often the most telling way to establish if you should purchase commercial auto insurance.

If you’re regularly using the vehicle to transport or deliver goods, perform a service, carry equipment or tools relevant to your industry, or transport people for money, coverage is necessary.

3. Owner 

Finally, take into account who the owner of the vehicle is. If you identify as a sole proprietor who mainly works from home and you don’t make deliveries to customers or routinely travel from one job site to another, a personal auto policy may be sufficient.

On the other hand, if your business owns the vehicle or you have employees that drive their own vehicles for business purposes, you should have commercial auto insurance.

If you’re looking for reliable commercial auto insurance, turn to Phil Taylor Insurance Agency to explore your options. They offer a range of high-quality products designed to safeguard business assets and will help you put together a comprehensive risk management plan with all the coverage you need. Since 1960, they’ve been providing the residents of Clarksville, AR, with protection and competitive pricing. Call (479) 754-2616 to request a quote, or visit them online to learn more about their services.