Purchasing the right insurance should be part of any comprehensive business plan. There are a variety of business coverages to consider, the most common being commercial general liability, professional liability, commercial property and workers’ compensation coverage.
Another important coverage to consider is business auto insurance. The business auto policy is specifically intended, unlike the personal auto policy, to cover vehicles that are used or designed for commercial purposes. This would include vehicles registered or leased in a company name, used by employees to perform their jobs or often garaged overnight at a location other than the policy address.
Talk to an insurance professional to help determine what type of policy you need based on your specific circumstances. There are number of companies represented in the Meadowlands Regional Chamber that can offer assistance, including NJM (New Jersey Manufacturers) Insurance Company. Visit the Chamber’s website for a full list of companies and agents.
Now that you’ve selected a company, it is time to submit an application. Be prepared to share information about your company’s operation. For example, the type of business (i.e. corporation, LLC, sole proprietorship, etc.), number of employees and the names and driver’s license numbers of everyone who will be driving for the company. It will also be helpful to have the following information handy regarding your vehicle(s):
- Year, make, model and VIN number
- After-market alterations
- Gross vehicle weight
- The exact use of the vehicle
- The normal radius driven
When purchasing your new policy, you will have to make several decisions about what you need to buy and how much you can afford to spend. Here are some questions to consider when determining coverage options:
- How much insurance do you need if you are sued because of an accident you might have caused that injured someone else or damaged their property? This is referred to as Bodily Injury Liability and Property Damage Liability Coverage.
- How much insurance do you need if you are in an accident caused by someone who has little or no insurance? This is called Uninsured and Underinsured Motorist Coverage.
- Do you need to buy insurance to cover your vehicle if it is damaged in an accident you cause, or if it is stolen or damaged in some other way? This is Physical Damage Coverage.
- How much money can you afford to pay out of your own pocket before the insurance company begins paying if you have an insurance claim? This is your deductible.
Your insurance company will also offer several ways to customize your policy with additional coverages or endorsements. These are optional and vary from insurer to insurer. You may need an endorsement if:
- You rent vehicles in the company name.
- You have employees who may drive their own vehicles for company business.
- The principal operators of company vehicles don’t have their own personal auto insurance.
Keep in mind that you will need to purchase a separate workers’ compensation policy to provide medical treatment, wage replacement and disability payments for employees. It will benefit select staff members that suffer job-related injuries, including those involved in a work-related auto accident.
Lastly, if your commercial vehicle will be used to transport passengers or haul cargo across state lines, your business must be registered with the Federal Motor Carrier Safety Administration (FMCSA) and have a USDOT (United States Department of Transportation) Number. To learn more, visit www.fmcsa.dot.gov.
Jim Cronin is an assistant vice president at NJM Insurance Group, a leading provider of commercial auto insurance in New Jersey. He earned a business administration degree from Trenton State College and holds a property/casualty insurance license. He has been with NJM for almost 30 years.