Many entrepreneurs and small business owners use their personal vehicles for business—but this practice can be risky. In the event of an accident, your personal auto insurance policy might not cover you for business use, while your business owner’s policy (BOP) isn’t likely to help unless you’ve purchased a commercial auto add-on.
Not sure if you need to upgrade your insurance policy? Ask yourself these seven questions.
1. Are any of your vehicles registered to a business?
This applies if your vehicle is registered to a business, partnership, or doing business as (DBA) entity.
2. dO YOU USE YOUR VEHICLE TO TRANSPORT GOODS or CONDUCT SERVICES?
Whether it’s construction materials or traveling between client offices, it counts.
3. Do you earn money by transporting people and/or property?
4. Is your vehicle built for working or hauling?
A vehicle with a gross weight of more than 10,000 pounds or one that is equipped with special features — like a snowplow — falls into this category.
5. Are you driving the vehicle regularly for business use?
Think of regularly as more than three times a month — not including commuting, of course.
6. Do Employees Routinely drive your vehicle?
This applies if the driving is part of their job responsibilities
7. Does your business use non-owned or hired vehicles?
In this case, employees may be using their personal vehicles to conduct business or you may routinely drive rental cars for business purposes.
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