As a building design business, your employees may be on the road quite often: driving to building sites, client offices, and even transporting materials if your firm also supervises construction. Are you prepared for the risks on the road that could result in significant medical expenses, claims, and lawsuits? That’s where Commercial Auto Insurance comes in.

What is Commercial Auto Insurance for building design professionals?

Commercial Auto Insurance provides coverage for vehicles owned or leased by your building design business and the passengers inside a vehicle in the event of an accident. Commercial Auto Insurance will cover you if your business is found to be at fault for any bodily injury or property damage. The policy will also step in to cover any medical payments if any of the passengers in your vehicle are injured, regardless of fault.

Commercial Auto Insurance also comes in handy if your company-owned or leased vehicles are damaged in any events outside of an auto accident. From theft to vandalism to fire, a number of perils are covered by Commercial Auto Insurance.

Do building design professionals need Commercial Auto Insurance?

If your building design business owns or leases vehicles titled in the name of the business, you will need Commercial Auto Insurance. Most states require a minimum level of liability insurance for every vehicle registered in the state. Uninsured and underinsured motorists also must be covered according to some states’ laws. Do note, however, that purchasing collision and comprehensive coverages are not required by law.

For vehicles that are not titled in the name of the business and instead are owned, leased, or titled in your personal name, you may still need to purchase Commercial Auto Insurance. Often times in small businesses, company vehicles end up being registered in the business owner’s name. Commercial Auto Insurance would be necessary in this case if the vehicles are used primarily for the business. You may need Commercial Auto Insurance if any of your vehicles are:

• Regularly used for business purposes such as visiting building sites, meeting with partners, and transporting clients
• Driven by employees, co-workers, clients, or volunteers
• Used to carry equipment, such as building supplies or tools
• A large truck, cargo van, or work van

What types of vehicles are eligible?

Commercial Auto Insurance can insure the following types of vehicles used for business purposes:

• Cars
• SUVs
• Light trucks
• Vans
• Large trucks (normally excluded from personal auto policies)
• Mobile equipment like backhoes or forklifts (required by some states)

Whether your business uses a single vehicle or a fleet of vehicles, Commercial Auto Insurance is available to cover them.

What does Commercial Auto Insurance cover for building design professionals?

Commercial Auto Insurance provides coverage for both liability and property. For vehicles that your business owns or leases, a minimum amount of liability coverage is required by most states. Property coverage protects the value of the vehicle your business owns or leases. If you have a lease or loan on your vehicle, the leasing company or bank may require you to have property coverage.

Commercial Auto Liability

What happens if your vehicle causes bodily injury or property damage? The liability component of Commercial Auto Insurance will cover these instances, and most states require every vehicle that your business owns or leases to have a minimum amount of this coverage. If you or one of your employees causes injury or damage while driving and has been found at fault for the accident, liability coverage will cover it. The insurance company will also pay for some of the costs of your legal defense.

• Bodily injury liability offers financial protection for your business if you or one of your business’ representatives is found at fault for causing injury to another person in an auto accident. This includes other drivers, passengers, or pedestrians. This liability coverage will pay for medical expenses, loss of income, pain and suffering, legal fees, and funeral costs. There will typically be a “per person” limit and a “per accident” limit, denoted as per person/per accident.
  • Example: The per person/per accident limit you’ve secured for your engineering firm is $100,000/$300,000. One of your engineers crashes into another car while driving a company-owned car to a client meeting and is found to be at fault for the accident. The four occupants of the other vehicle are seriously injured and sue your business. The insurer will pay up to $100,000 in damages to each of the occupants, with a maximum of $300,000 total paid out.
• Property damage liability offers financial protection if you are found at fault for an auto accident and cause damage to the property of others. It covers other vehicles and any type of property, such as a home, building, or fence.

Commercial Auto Property

Commercial Auto Insurance also has a property component that protects the value of your vehicle.

• Collision coverage will cover physical and mechanical damage to your vehicle in the event that it’s hit by another vehicle or object.
  • Example: An architect who is driving to a building site crashes his work vehicle into a wall. Collision coverage would pay for the cost to repair the vehicle. If the cost of repairing the vehicle exceeds the value of the vehicle before the crash, collision coverage would pay the pre-crash value of the vehicle.
• Comprehensive physical damage will cover the loss of your vehicle in the event that it’s damaged or stolen. Covered perils generally include: fire, flooding, theft, vandalism, falling objects, and glass breakage.
  • Example: An interior designer is meeting with a client at his home, when the company car he parked on the street is damaged by a fallen tree branch. Comprehensive coverage would pay you the cost to repair the vehicle, or if it is not repairable, comprehensive would pay the value of the car before the branch fell on it.

Uninsured and Underinsured Motorist Coverage

Required in some states, uninsured and underinsured motorist coverage protects your business if a driver with no insurance or not enough insurance causes an accident involving your work vehicle.

• Uninsured motorist coverage: If a driver with no insurance damages a vehicle owned by your business or causes injuries to your driver or other passengers, the other driver may be unable to pay for the injuries or damage since he has no insurance. In these cases, uninsured motorist coverage would step in.
• Underinsured motorist coverage: This covers a similar scenario—except in this case the driver has insurance, but he doesn’t have a liability limit high enough to cover the medical expenses or property damage. This often happens when drivers purchase only the minimum coverage required by law.

Medical Payments Coverage

Medical payments is a no-fault coverage. Regardless of who is at fault for the accident, the coverage will provide payments for medical and funeral expenses for the driver and passengers in your vehicle. Medical payments coverage usually has a lower limit of liability, which is around $10,000-$30,000. This coverage can be added to a Commercial Auto Insurance policy through an endorsement.

What doesn’t Commercial Auto Insurance cover for building design professionals?

Building design professionals who drive their personal cars or who hire, rent, or borrow cars for business purposes are not covered by Commercial Auto Insurance. Businesses should purchase hired and non-owned auto coverage to supplement their Commercial Auto Insurance to address these instances.

Hired and non-owned auto insurance can apply whenever an employee causes an accident with a vehicle that is hired or not owned by the company while fulfilling business purposes. In the event of such an accident, your company may be held liable for damages, in which case hired and non-owned auto insurance would kick in.

Hired and non-owned auto coverage is important for building design businesses that:

• Have employees who drive their personal vehicles for business purposes, such as driving from one building site to another building site or picking up building materials.
• Send employees on business trips where they rent vehicles
• Hire livery cars or use personal cars to pick up or drive around clients

Example: A project manager at a design build firm uses his personal pickup truck to transport drywall to a client site.

Commuting from home to work or any personal errands will not be covered by hired and non-owned auto coverage.

How much does Commercial Auto Insurance cost?

Pricing for Commercial Auto Insurance depends on several factors, including:

• Type of business you run
• Number of vehicles
• Type of vehicle
• Coverage types

Annual premiums usually run about $750 to $1,200 per vehicle for small business owners.

How much Commercial Auto Insurance do I need?

A minimum of $500,000-$1 million in Commercial Auto liability is usually adequate. You may also consider purchasing a commercial umbrella policy to provide another layer of financial protection should you exhaust the limits of your Commercial Auto Insurance.

Final Word

For architects, engineers, and other building design professionals who regularly use company-owned or leased vehicles, Commercial Auto Insurance can provide peace of mind. Driving on the road exposes you and your employees to the risk of getting into an accident that can result in bodily injury, damaged vehicles, and serious financial consequences. Commercial Auto Insurance will cover both property damage and liability for unforeseen events on the road.