Commercial Auto Insurance is not just about insuring a truck, van, or company car.

It is about how that vehicle fits into your business — who drives it, what it is used for, where it travels, what it carries or tows, and how much your business depends on it every day.

That is where mistakes can happen.

A business may have Commercial Auto Insurance in place and still discover that its policy no longer reflects the vehicles, drivers or operations it has today. Or it may assume that tools, trailers, employee-owned vehicles or certain types of business use are automatically covered when they require additional consideration.

And sometimes the problem is simply that the policy has been renewed year after year without anyone stepping back to review whether it is still the right fit.

The good news is that many of these issues can be avoided by asking the right questions and keeping your broker informed.

Whether you have one work vehicle, several service vans or a growing fleet, here are eight Commercial Auto Insurance mistakes business owners should avoid.

1. Assuming your Personal Auto Insurance is enough for business use

One of the first mistakes is assuming that because you personally own a car, pickup or van, your Personal Auto policy will automatically cover however you use it.

Personal and Commercial Auto Insurance are designed for different types of use and risk.

Driving your vehicle to and from your regular workplace is different from regularly using it to carry tools, make deliveries, haul materials, travel between job sites or visit customers throughout the day.

That doesn’t mean every occasional work-related trip automatically requires the same type of Commercial Auto policy. But it does mean your insurer needs to know how the vehicle is actually being used.

Depending on the type and frequency of business use, your Personal Auto policy may need to be adjusted or Commercial Auto coverage may be more appropriate.

Avoid the mistake: Tell your broker exactly how you use the vehicle. Don’t assume a Personal Auto policy is enough simply because the vehicle is personally owned.

2. Not accurately describing how your vehicles are used

Getting the vehicle onto the policy is only part of the job.

Your insurer also needs an accurate picture of what that vehicle actually does.

Consider two identical pickups.

One is driven locally by a salesperson visiting customers. The other travels between construction sites every day carrying tools, hauling materials and towing a trailer.

Same vehicle. Very different use.

Where the vehicle operates, how far it travels, what it carries, whether it tows equipment and the type of work it performs can all affect the insurance you need.

Problems can arise when a business changes but the insurance information doesn’t.

Maybe you start making deliveries. You expand into another area. You begin towing equipment. A vehicle that once stayed close to home starts travelling much farther.

Those changes matter.

Avoid the mistake: Give your broker a realistic picture of where your vehicles go, what they do, what they carry and how frequently they are used.

3. Forgetting that the drivers matter too

Commercial Auto Insurance isn’t just about the vehicles.

It is also about who is behind the wheel.

The driving history, experience and licence status of employees who regularly operate company vehicles can affect both eligibility and premium.

That makes driver management an important part of managing your Commercial Auto risk.

A good approach can include:

• Checking licences and driving records
• Confirming drivers have the appropriate licence
• Establishing minimum driving standards
• Providing driver orientation and training
• Having clear rules around speeding and distracted driving
• Reviewing driving records periodically
• Keeping your broker informed when regular drivers change

One common mistake is simply failing to update the insurer when a driver changes.

You hire someone new who will regularly drive the company truck. Another employee leaves. Someone takes on a new role that puts them behind the wheel every day.

Those are insurance changes too.

Avoid the mistake: Keep your driver information current and make driver screening and safe-driving practices part of your business.

4. Choosing your Commercial Auto Insurance based on price alone

Every business wants to control costs.

But the cheapest Commercial Auto policy is not necessarily the best value.

Two quotes can look similar on the surface while providing different liability limits, deductibles, physical-damage coverage, endorsements or other protection.

You need to understand what you may be giving up to get the lower price.

This is particularly important with liability coverage. A serious at-fault accident involving a commercial vehicle can result in significant financial liability. Customers, general contractors, landlords or other organizations may also require your business to maintain particular automobile liability limits.

Physical-damage coverage deserves the same attention.

Removing Collision, Comprehensive or other optional protection may lower your premium, but it also means your business is accepting more of the financial risk if something happens to the vehicle.

The objective isn’t necessarily to buy the most insurance possible.

It is to buy the right insurance for your business at the right value.

Avoid the mistake: Compare coverage, limits and deductibles as well as price. Know what you are buying — and what you aren’t.

5. Assuming everything in, on or behind the vehicle is automatically covered

This is one of the most important Commercial Auto misconceptions.

You insure the van.

That doesn’t necessarily mean the thousands of dollars worth of tools inside the van are insured.

You insure the pickup.

That doesn’t necessarily mean the trailer behind it, the equipment on the trailer and the materials being hauled are all automatically protected against every type of loss.

Commercial Auto Insurance primarily protects the automobile according to the coverage you have purchased.

Tools, equipment, inventory, cargo, trailers and customer property can create separate insurance requirements.

For contractors and trades businesses in particular, the value of what is being carried can sometimes be substantial.

A work van or pickup can effectively become a mobile workshop, with thousands of dollars invested in tools and equipment in addition to the value of the vehicle itself.

Avoid the mistake: Tell your broker what you carry and what you tow, not just what you drive.

6. Forgetting about vehicles your business uses but doesn’t own

Not every vehicle being used on behalf of your business necessarily belongs to the business.

An employee might use their own car to visit a customer.

Someone might use a personal pickup to pick up supplies.

The company may rent a vehicle for a business trip or temporarily use a vehicle it doesn’t own.

Those vehicles can create liability exposures even though they don’t appear on your company’s list of owned automobiles.

Depending on your operation, non-owned or hired automobile coverage may be appropriate to address certain liabilities involving vehicles your business doesn’t own.

This can be particularly easy for smaller businesses to overlook.

You may own one work vehicle but also have several employees occasionally using their own vehicles on behalf of the business.

Your automobile exposure may therefore extend well beyond the vehicles your company owns.

Avoid the mistake: Tell your broker about employee-owned, rented or other non-owned vehicles being used for business purposes so the appropriate coverage can be considered.

7. Not keeping your Commercial Auto policy up to date

Your business doesn’t stand still.

Your Commercial Auto policy shouldn’t either.

You may add or replace vehicles. Employees come and go. Driving responsibilities change. You start making deliveries, towing different equipment or travelling into new areas.

Any of those changes can affect your insurance.

Some changes are obvious:

• Buying another truck
• Selling or replacing a vehicle
• Hiring a new regular driver
• Adding a trailer

Others are easier to overlook:

• A vehicle starts travelling farther
• An employee begins using a vehicle differently
• You start transporting different goods or materials
• A seasonal vehicle is now being used differently
• The business expands into a new type of work
• You start operating in a new geographic area

Your broker can only work with the information they have.

If your business changes but your insurance doesn’t, the policy may no longer accurately reflect the operation you are running.

Avoid the mistake: Contact Munn whenever there is a meaningful change to your vehicles, drivers or how they are being used. Keeping your information current helps make sure your coverage continues to reflect your business today.

8. Renewing your Commercial Auto Insurance without a proper review

One of the easiest Commercial Auto Insurance mistakes to make is simply allowing the policy to renew without taking the time to sit down with your broker and review it properly.

Your business can change a lot over the course of a year. That is why it is a good idea to have a mid-term discussion with your broker and then another full review well before renewal.

A mid-term meeting gives you an opportunity to talk about what has changed and what may be coming next.

You may have:

• Added, replaced or removed vehicles
• Changed drivers
• Expanded your operations
• Taken on new contracts
• Changed how vehicles are being used
• Started towing different equipment
• Changed where your vehicles operate
• Experienced claims or losses worth discussing

It is also an opportunity to look ahead.

Are you planning to:

• Buy or replace vehicles?
• Hire additional drivers?
• Add another location?
• Expand into new areas?
• Start making deliveries or hauling different materials?
• Bid on contracts with new insurance requirements?
• Grow from a few vehicles toward a fleet?

Those plans can affect your Commercial Auto Insurance, and discussing them early gives your broker an opportunity to help you prepare.

Then, well before renewal, sit down with your broker again and review the entire Commercial Auto program.

Don’t simply look at the new premium and renew.

A proper renewal review should consider:

• Your current vehicles and drivers
• How your vehicles are being used
• Your claims and loss experience
• Liability limits
• Deductibles
• Collision, Comprehensive, All Perils and other optional coverage
• Contractual insurance requirements
• Available discounts or credits
• Whether your current insurer is still the right fit
• Whether other insurance markets should be considered
• Whether your business has grown enough to consider a different policy structure or fleet arrangement

Starting that conversation early also gives your broker time to explore alternatives and properly compare the market if your current insurer is no longer the best fit.

Avoid the mistake: Don’t just let your Commercial Auto Insurance roll over from one year to the next. Meet with Munn during the policy term to discuss your business and future plans, and again well before renewal to make sure your coverage, insurer and pricing still make sense.

The biggest mistake? Making assumptions about your coverage

Most Commercial Auto Insurance mistakes come back to one issue:

Assumptions.

Assuming your Personal Auto Insurance is enough.

Assuming every employee can drive the vehicle.

Assuming your insurer knows your vehicle use has changed.

Assuming the tools are covered.

Assuming the trailer is covered.

Assuming an employee’s personal vehicle isn’t your concern.

Assuming you have enough liability coverage.

Or assuming the policy you bought several years ago is still the right policy today.

A better approach is to make sure your Commercial Auto Insurance reflects the way your business actually operates.

Start with some straightforward questions:

• What do you drive?
• Who drives it?
• How do you use it?
• What do you carry or tow?
• What has changed since the policy was arranged?
• What changes are you expecting over the next year?
• Is your current coverage still the right fit?

The more your broker understands about your operation, the better they can help you identify potential gaps and make informed decisions about your coverage.

Avoid Commercial Auto Insurance mistakes. Talk to Munn.

At Munn Insurance, we take the time to understand your business, your vehicles and how you use them.

Whether you have one work vehicle or a whole fleet, we can review your existing Commercial Auto Insurance, identify areas that deserve a closer look and compare options from multiple insurance companies.

Already insured somewhere else? No problem. A second look can help you understand what you have, what you may be missing and whether you are getting the right combination of coverage and value.

Ready to review your Commercial Auto Insurance?

Visit munninsurance.com/business/commercial-auto-insurance-for-atlantic-canada or call 1-855-726-8627 to speak with a Munn commercial insurance specialist.

Avoid the gaps. Get the right coverage. Get the right value. Keep your business moving.