“My customer says that I have to supply them with a certificate of commercial auto insurance. I carry personal auto insurance on all my vehicles. Why isn’t that sufficient?”
Simply put, a personal auto policy doesn’t provide the same type of coverage or cover all the same types of vehicles that a commercial auto policy does. When you are working for a customer and driving onto the property they own or lease or may interact with their employees or customers in the parking lot of the building where you are to work, they want to be sure that if one of these people are injured or property is damaged as the result of your being at the site with your vehicle to work for them that your policy will pay any resultant claims.
“But won’t my personal auto policy cover such claims?”
It might, depending on the situation, but it might not. And that is why the customer wants a certificate of commercial auto insurance. Here are some examples where many or most personal auto policies will not provide coverage.
You use a vehicle other than a car, pickup or panel van. Remember your customer doesn’t want to have to know every type of vehicle that you might use or obtain after he starts dealing with you. The customer just wants to know that you’re insured and losses you cause will be paid for by your insurance.
You have an employee that uses his vehicle in your business.
You rent a vehicle that you use in your business.
Someone is hurt loading or unloading your vehicle.
You tow a trailer or contractor’s equipment with your vehicle.
These and other situations can create uncovered claim situations when a vehicle insured on a personal auto policy is used in business operations.
But even aside from what your customer requires, since the above situations can create uncovered claims, you also may be left uncovered if you rely upon your personal auto policy to cover these situations for your business use of autos.
Likewise if you have truck mounted contractor’s equipment, your personal auto policy is unlikely to cover damage to that equipment but a commercial auto policy can if the value of the added equipment is declared to the insurer.
There is another reason to carry a Commercial Auto policy if you have employees. If your employees drive your vehicle in the business and they have an accident, it you have the vehicle insured on your personal auto policy your personal insurance will likely go up on all your personal vehicles, that is if your personal auto insurer agrees to renew your personal auto policy after they get stuck paying a claim for an employee they didn’t even know was a driver on your policy.
The way to avoid problems is to obtain a commercial auto policy for vehicles used in your business.