Business Automobile Insurance for Veterinarians

Commercial Auto

Is your business properly protected for the open road?

This single easiest way to have a catastrophic claim event in the lifecycle of your veterinary hospital is when vehicles are used in your business. Simply not having a commercial vehicle doesn't change this reality as employees can also cause automobile accidents running errands for your business while operating their own vehicle. Regardless of use, having the right coverage is critical to protecting the long-term financial viability and your business.

What is Commercial Auto Insurance?

Commercial Auto Insurance helps cover the costs of an auto accident if you or an employee is at fault. This coverage can help pay for damaged property and medical expenses - even in a fatal accident. This type of coverage is used when a business owns a vehicle, that is titled in the name of the business and is used for business related errands or business operations. Examples of how this coverage could respond include:

An employee causes an auto accident in a company vehicle
An employee causes an auto accident in their own vehicle
An owner, officer or employee causes an auto accident in a rented vehicle

When would you need Commercial Auto Insurance?

You would need Commercial Auto Insurance once you purchase a vehicle which will be titled in your business name or your lease a vehicle for greater than 12 months, also in the business name.

Are you still exposed even if you don't own a commercial vehicle?

Yes! The most common way you could be held liable from an auto accident in a veterinary hospital is when an employee uses their own vehicle when running an errand for your business. Even though the employee would be considered primary in the accident, since they were operating their own vehicle at the time of the accident, you could be held financially liability for any damages in excess of the policy limits of your employee.

What if employees use your personal vehicle?

Literally, never do this. If an employee were to run an errand or do anything for you while using your personal vehicle, and they caused an auto accident, you could instantly pierce your corporate veil and be held personally responsible for any damages in excess of your personal auto policy liability limits. Worse, in some states the injured party could also sue your business while simultaneously suing you personally. For more information about the legality of a situation like this we always recommend speak to an attorney. But the quickest way to avoid the situation altogether is simply to never let anyone drive your personal vehicle for any reason.

Commercial Auto coverage types

Commercial auto policies include coverage for property damage, liability and more:

Liability: Protects your business from claims for injuries and property damage. It is required by law if you own a vehicle.
Underinsured Motorist: Helps pay your expenses if an underinsured driver hits you. In essence, your insurance company steps into the shoes of the person who hit you to pay the amount their policy could not cover. But this coverage is not mind blowing when it comes to legal performance as you often have to sue your own insurance company to get paid because most insurers wait until you are completely recovered to send you a check, which could be years and long after you are financially ruined.
Uninsured Motorist: Protects you if you're in an accident with an at-fault driver who did not have insurance coverage at all.
Medical Expense: This is often provided per person or per occupant of a covered vehicle. Commercial auto insurance typically only offers $5,000 or $10,000 in coverage. Unlike uninsured and underinsured motorist coverage where you have to wait to get paid and likely sue your insurer, medical expense or "med pay" can be drawn from very quickly after an accident to cover some upfront medical bills. For this reason, always max out whatever limit you can get for this coverage. Personal auto insurers are more known for giving limits of med pay up to $50,000 or $100,000. Commercial auto insurers do not under the logic that medical expenses of the occupants of a commercial auto would likely be covered by workers compensation insurance.
Collision: Protects against vehicle damage not caused by a collision with another vehicle. A deductible will apply.
Comprehensive: Protects against vehicle damage to the vehicle, including acts of nature, theft, and vandalism. A deductible will apply.
Hired Auto Liability: Protects your business from claims for injuries and damage to individuals and property caused by a vehicle that you rent (<12 months). Vehicles rented for greater than 12 months are considered leased and required to be added, or scheduled, on the policy the same as an owned vehicle.
Non-Owned Auto Liability: Protects your business from claims for injuries and damages to individuals and property caused by a vehicle that you do not own.

What type of vehicles can be listed on a Commercial Auto policy?

Cars
Trucks
SUV's
Large mobile veterinary hospitals (Laboit, Ford E450, etc.)
Trailers

Coverage limits to consider

The most significant risk to any business owner is lack of vision. Most people don't want to dwell or endeavor to imagine the horrible things that can happen to them, their family, friends or employees. Or worse, many people simply sedate themselves with the false belief that catastrophic things won't happen to them. But bad things can happen. And when they do it may be too late to prevent a financial hardship.

Always "maximize the underlying!" Whether thinking about a commercial vehicle, your personal car, boats, homes, second homes, etc., always maximize the underlying limit of liability. For a commercial or personal auto policy that means, take a $1,000,000 liability limit. And even though underinsured and uninsured motorist require a fight with your insurer, max those out as well along with any applicable med pay limit. You can compare rates from carriers and try to save money where you can, but saving money at the expense of coverage is not recommended.

What is meant by "underlying?"

The underlying limit of liability is the limit of coverage you have on a policy such as a commercial auto policy. We call it underlying because if you were to purchase an umbrella policy, the commercial auto limit would be under the umbrella. An umbrella acts as extra or excess liability limits that can be used if the underlying limit was exhausted in a claim or lawsuit.

This same type of relationship can exist with how a personal umbrella can hang over your personal auto policy, homeowners, etc.

Please note, attempting to combine a commercial umbrella to a personal vehicle or your home is not typically available nor recommended. It's best to keep your personal assets and risk exposure separate from your business and vice versa. So, while we universally recommend our clients to consider purchasing an umbrella for their business, we also recommend people, especially business owners, to obtain a personal umbrella to accompany their personal insurance policies seperately.