If your franchise uses vehicles as part of business operations, commercial auto coverage for franchises should be a part of your insurance program. Commercial auto insurance is a type of coverage designed to protect businesses when they use vehicles for business purposes.

Coverage can protect you from damages, lawsuits and other expenses you could face when you or one of your drivers has an accident. Different coverage options exist to meet your needs, depending on whose vehicles you use and how you use them. Your insurer can help you get the coverage you need and offer resources that help reduce your chance of an accident. Here’s what to know.

Insurance Requirements

If your franchise uses vehicles for business purposes, you face certain risks that other brick-and-mortar franchises don’t. Having employees that drive for work and company vehicles that have to be serviced and maintained increases your exposure to accidents, claims and liability lawsuits. Liability may also exist for certain rented and employee-owned vehicle use.

Most states require insurance for vehicles your business owns and operates. For those that don’t, you may still be liable for damages and injuries your driver causes. Even where commercial auto insurance isn’t required by law, it’s a smart choice that helps to protect your business’s assets.

You may need a commercial auto coverage for franchises if:

  • Has a vehicle titled to your business.
  • Provides delivery, pickup or in-home services.
  • Carries tools, equipment or business products.
  • Transports customers, clients or employees.
  • Utilizes delivery drivers or couriers.

Exposure Risks

In insurance, auto claims are common. More than six million accidents happen each year and dozens of road fatalities occur every day. Drivers face risks from hazardous driving conditions, vehicle problems, other drivers and in-vehicle distractions. Vehicles you operate can also face risks from theft, vandalism and other losses and damages.

Unfortunately, even good drivers can end up in an accident that results in property damage, medical bills and legal expenses. When a vehicle is operated for a business, these and other costs become the liability of the business that owns or operates that vehicle.

Insurance Protection

To protect your business from costly claims and litigation, it’s important to make sure you have the proper commercial auto insurance coverage.

For business-owned vehicles, commercial auto coverage can provide:

  • Auto accident liability for damages you cause in an accident to vehicles and other property as well as legal expenses if a lawsuit arrises.
  • Collision coverage for damages to your own vehicle when you or someone else causes an accident, regardless of who’s at fault.
  • Comprehensive damage and collision coverage in the case of vandalism, theft, weather damage or impact with an object.
  • Bodily injury coverage for medical, legal and other expenses due to an accident where you are at fault.
  • Uninsured and underinsured motorist coverage where another driver who is at fault in an accident does not have sufficient coverage for losses.

For vehicles that are rented or leased by your business or that are owned by your employees, hired and non-owned auto (HNOA) coverage is available which can provide coverage for:

  • Bodily injury and property damage for vehicles your franchise does not own for damages in excess of other existing insurance policies.
  • Use of a hired vehicle or a vehicle owned by employees or third parties for use by your business.
  • Includes coverage for you, your employees and the vehicles of employees and third parties.

You can make sure your franchise has the insurance protection it needs by speaking with your insurance representative about your vehicles and their use in your business operations.

Safety Guidelines

Following the right safety guidelines can help reduce the risk of a commercial auto claim, protecting your vehicles and your employees.

Consider these questions when deciding who is allowed to drive one of your vehicles or operate a personal vehicle for franchise purposes:

  • Do they have a valid driver’s license and their own vehicle?
  • Have you researched this person’s driving record?
  • Is there anything about this person’s background that would make them a risky choice as a permitted driver?

When it comes to operating any vehicle for your franchise, your policies should include:

  • Standards for a driver’s motor vehicle records, particularly if there is a violation on the job.
  • Prohibited activities while driving, such as using cell phones or texting.
  • Accident and violation reporting requirements.
  • Required driver training.
  • Penalties for violating any of the policies.

Remember that your business can be held liable for any accidents or incidents involving your drivers, vehicles you own, and potentially even those vehicles you don’t own. A key factor in claims is often the claim of negligence when screening, training or monitoring drivers. These safety guidelines can help protect you from such claims.

Commercial Auto coverage for franchises from Lockton Affinity can help you protect your franchise from legal fees and damages when your fleet vehicles are involved in a crash. Hired and Non-Owned Auto Liability Insurance (HNOA) from Lockton Affinity protects you when your employees are driving their own vehicles or rented vehicles for business purposes. These coverages can help you reduce your risk and limit exposures.

Call Lockton Affinity at (844) 456-1518 to learn more about HNOA Insurance and Commercial Auto coverage for franchises.