What are the benefits of commercial auto insurance?
The issue that it is mandated in every state that any vehicle above 50cc must have some type of liability insurance to operate legally. Commercial auto insurance does not have the same exclusions that the personal auto policy have, specifically wording relative using that auto in a business capacity.The benefit is hat it transfers the risk of having to pay out a significant sum of money, if a jury of our peers were to find that the commercial vehicle operator behaved in a negligent way. This allows you to use more of your operating capital ,rather keep it in reserves in case there is a catastrophic auto accident event .A second more subtle benefit is you can have “your” lawyers fees paid as they try to defend you or your employees actions.In most cases, I see that small fleets are driving with too low of limits. So to be dramatic, I ask, “if I was on my cell phone and blew through an intersection illegally and caused significant medical and rehab bills to your children, how much would you sue me for? “ ?” A million bucks?”If it goes to court, or mediation, and it is determined that the claimant should be awarded $165,000.00 but your insurance coverage limit is only $100,000.00 there is a problem. That is a $65,000 problem for the business and all its stakeholders. The insurance company can walk away after the policy is limited out. This leaves you alone to fight liens and garnishments placed on your business and may also in some cases come after you personally depending on the legal structure of your commercial venture.In reality, this really doesn't happen that often, but neither do tornadoes. My personal recommendation is insure to the level of your net worth then add 25% of net income. Yes, that number can be very high, but I ask again , if the roles were reversed, and I was negligent in destroying your ability to work, how much would you sue me for?
Are towing services responsible for damages they cause while towing your car?
The main reason the question of who should pay continues to come up is due to the fact that most towing companies don’t have a written policy in place that spells out exactly who pays what, when damages occur.Not having a written policy in place is a problem for more than a few reasons.First, when you don’t have a set policy for dealing with damages, you must then rely on your own judgement.Of course it’s your business and I’m not suggesting there’s anything wrong with your judgement. You probably have a good idea for who is careful and who’s not.But imposing unwritten rules can be risky. Because when you rely, only, on your judgement and choose to impose unwritten rules on the fly, based on what you’re feeling that day, this might be considered arbitrary punishment. And if a disgruntled driver feels like you’ve singled him out, this could be considered discrimination, and you could be setting yourself up for a suit.On the other hand if it’s written-out and made clear to everyone that this policy applies to all equally, there’s no ambiguity.Besides the obvious benefit of shielding yourself from being sued, having a damages policy in place does something else. It sets expectations. And, as I’ve discussed in a previous article, when you expect more out of people, you usually get more. When drivers know that you expect them to care for company property and understand that there are real-life consequences for not doing so, they will come up to the task.And lastly—It’s good for business. Disregard for company property can lead to mal-treatment of a customer’s property. And nothing can harm your business more than the negative “press” you get when you damage someone’s car. Having a damages policy that includes a progressive discipline policy can help to not only deter damages but weed out offenders before the problem becomes exacerbated.So who should pay? It’s up to you.