As a business owner, you're constantly looking for ways to improve your services and maximize profits. Perhaps you have decided to offer commercial auto services in order to reach more customers. It's recommended that you obtain commercial auto insurance in order to protect your business if an emergency occurs. It's also recommended that you research commercial auto insurance for hired autos. Here is a closer look.
A hired autos clause is contained in most commercial auto policies. The clause outlines all of the vehicles that you are leasing or borrowing for your business. Information about hired auto clauses is generally included on the first page of your auto insurance policy. It's recommended that you look over the ISO Business Auto Coverage Form to learn about the auto designation symbols
Many commercial auto insurance policies utilize the same hired auto terms found in ISO auto policies. You are classified as the named insured if you are leasing the vehicles. You will be listed in the policy declarations. Any vehicles that are rented by someone other than the named insured are not classified as hired autos. Be aware that hired autos are not vehicles that you lease or borrow from your employees. Other potential exclusions include vehicles that you lease, hire, or borrow from your partners, members, and anyone in your household.
Non-owned autos are any vehicles in your fleet that are not hired autos. Common examples include vehicles that you rent from your employees or business partners. Many businesses use non-owned autos when they rent vehicles for a few days to perform services at a special convention or exhibit.
Be aware that you can add commercial auto insurance for hired auto to cover your business in a potential liability situation. Perhaps one of your employees accidentally hits someone or damages property. Liability insurance covers the injured party's medical treatment. The policy also covers potential repairs and replacement costs regarding the damaged property. Calculating your premiums is more complex than traditional auto insurance policies. In most cases, insurers calculate the premiums based on the cost of the rental agreement.
It's recommended that you pay attention to the auto's lease period. Obtain a copy of the commercial lines auto manual to view guidelines regarding leased autos. There are clear differences between short and long-term leases. Hired autos are classified as short-term leases, while any leases over half a year are viewed as similar to owning a vehicle. It's entirely possible that you may decide to sign a long-term lease. The lender may ask you to cover them in your policy as an extra insured. Your insurer can add an endorsement to your policy. Your general commercial auto insurance policy may not mention any of ISO's lease guidelines.
Finding commercial auto insurance for hired auto protects your business while also giving the owner some security as well. If you have any questions regarding coverage, contact the team here at Little and Sons Insurance Services, and we will assist you.
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