Tips for Insuring Work Vehicles
Construction is one of the most hazardous occupations in America, and some of that risk occurs before you or your crews even get to a job site, according to data from the federal government and insurance companies.
Construction workers accounted for 12 percent of work-related driving fatalities on U.S. public roads in 2016, or about 150 deaths, according to the National Institute for Occupational Safety and Health. Pickup trucks were involved in 13 percent, or 162, of the 1,252 work-related driving fatalities on public roads that year.
The CDC Foundation estimated that non-fatal motor vehicle crashes cost employers an average of $65,000 in 2013, including sick leave, medical and insurance expenses, property damage and lost productivity.
How much liability insurance is enough?
While Pros in the building trades should have separate general liability or professional liability insurance policies for their businesses, commercial auto coverage is what helps businesses address costs in the wake of accidents involving their work vehicles.
Most states require businesses to carry a minimum amount, but it’s typically no higher than what they require on personal auto policies. Your state may also require you to buy underinsured motorist and uninsured motorist coverage for your work vehicles.
In 2015, The Hartford reported that vehicle accident claims made by its small business customers averaged about $45,000. Still, most insurers recommend that businesses carry $500,000 and offer up to $1 million in liability coverage. If you want more than that, you need to consider a commercial umbrella policy, which you can use to pay costs that exceed liability limits of your commercial vehicle, workers’ comp and general liability policies. Umbrella policies are typically available in increments of $1 million and cost $6,750 to $11,750 for construction companies, according to Insureon.
If some of your employees drive their personal vehicles while working for your business, you will want to purchase optional Hired and Non-Owned Auto Liability and Hired Auto Physical Damage coverage. These policies are usually available at a small additional cost.
If members of your household will drive your commercial vehicles, be sure to ask whether you can add them to the policy. If your business is organized as a partnership or corporation, you may also want to add a “drive other car” endorsement.
To insure against theft of tools stored in your vehicle, you will probably need to add an inland marine policy, which will cover the cost of replacing equipment, whether it was stolen from your shop, a job site or one of your vehicles.
“Unless there is an insurance carrier offering a very unique commercial vehicle insurance, tools, equipment, supplies, etc. are not covered by the auto policy,” says Richard D. Barnard of Lighthouse Insurance Group in Holland, Michigan. “They need to be insured under an inland marine form for contractors’ tools and equipment, which should be readily available as part of the contractor’s insurance package.”
Confirm whether your policy covers the cost of renting a replacement vehicle. Better yet, buy your truck or van from Dodge and enroll in BusinessLink.
Keeping premium costs down when insuring work vehicles
You can take a few steps to control premium costs when insuring work vehicles, once you’ve decided how much insurance you need. First and foremost is hiring employees with safe driving records.
“Business owners should perform a Department of Motor Vehicles screening when hiring employees that will drive company vehicles or use their own vehicles as part of their jobs because the driving records of employees can impact your premium,” says Murphy Insurance Agency, a Massachusetts agency that serves many construction companies. “Having employees with good driving records listed on your commercial auto policy will help keep your premium low.”
When insuring work vehicles, drivers between the ages of 30 and 65 are typically given better insurance rates.
Be sure to inquire about multi-vehicle and multi-policy discounts. Most major auto insurers will reward customers who insure both personal and work vehicles with a discount.
Another tip for insuring work vehicles is to see if you qualify for any affinity program discounts through memberships in professional organizations. These can cut as much as 10 percent off your commercial vehicle insurance bill.
Finally, remember that if you are self-employed, you may be able to deduct your commercial auto insurance premium under a Schedule C.