(Newswire.net — August 19, 2017) — It used to be that a small number of employees were insured to use a company vehicle; they could drive it for restricted purposes and if anything happened the company covered it. In today’s gig economy, however, more of us are using our personal cars for business purposes. Whether it’s driving for Lyft or Uber, or just running a small business from home, our cars are an extension of our professional lives.
With that in mind, then, what happens if you’re in an accident while using your personal car for business? What’s covered and what kind of liability might you face?
In certain regards, all car accidents are the same – your car, your problem – but if client materials are damaged, for example, your insurance may not be responsible. If you use your car for professional activities, here’s what you need to know before trouble strikes.
Insurance Policy Basics
There are two main types of auto insurance small business professionals should be aware of: personal auto insurance and small business insurance. All drivers are required to have personal auto insurance on their individual vehicle in the event of an accident, although the type and extent of coverage varies based on state and characteristics of the driver. Unfortunately, even an accident on a quick work errand, like picking up supplies or delivering a report, might not be covered by personal insurance.
Have a Plan
The best way to make sure that an accident is covered by insurance, whether it takes place during work or personal activities, is by knowing how to respond in the aftermath. First, always prioritize receiving medical care. If you don’t seek care immediately, any injuries may be contested.
Next, make sure to take photos of the accident scene and any damage incurred, and save all receipts for repairs, medical care, rentals, and other expenses. You should also request a copy of the accident report that outlines all the information police collected about the case. This report may be the deciding document in determining coverage and will offer vital information for both your lawyer and the insurance company. Make sure you have this in hand.
Who Has Your Back?
What type of business activities you perform with your car will have a significant bearing on what kind of coverage you’ll need, so it’s important not to make any assumptions about your job. For example, many people who work for Uber or Lyft assume that they don’t have to make any changes to their insurance when they begin driving for these companies. The understanding is that their personal auto insurance is enough and the company will take care of anything beyond that. Though the companies do typically offer some supplementary insurance, this may vary by area and with variability within the company.
Out on Your Own
For independent businesses, the stakes are even higher because there’s no one to provide any supplementary coverage. Consider what might happen if you start a home-based business. Some will never impact your status as a driver – maybe you do graphic design work or offer language tutoring over the internet – but others pose a significant risk. We’ll take a pet transport business as an ideal example.
Pet transportation services are great for people who need to take their pets to the vet or for longer distance jobs such as to assist owners who are moving across state lines. To operate this kind of business, you might need small business auto insurance as well as cargo insurance. And depending on how much you drive, you may also need a commercial driver’s license – all of these factors can impact your eligibility for coverage as well as whether vet bills will be covered if an animal is injured in transit.
Every business comes with specific liabilities but almost any independent position will require driving at some point, so it’s best to be prepared. Look into your state’s rules and regulations for business-related driving and follow them to the letter. The insurance companies will certainly hold you to that.