You could find yourself being held liable for an accident and suffer a denial of your claim by your car insurance company if you use your personal car for business-related activities and do not have the proper insurance. Using your vehicle for business purposes is strictly prohibited in most personal car insurance policies. You will essentially be driving without coverage. Insurance companies typically deem any business-related use other than commuting to and from your work as a violation of your family’s personal car insurance policy.

You may wonder what the big deal is, but if your car insurance is voided or your claim is denied because of your misuse, you could face a large personal liability without insurance protection. If your car insurance claim is denied, you could be personally responsible to pay for the car repairs, medical bills, and lost wages of the person you hit. If you are sued, you could find yourself having to pay for the judgment without your insurance company’s help, and the cost could quickly spiral out of control.

Many small businesses or sole proprietors just starting out tend to think they can skirt around the issue of purchasing commercial auto insurance. Commercial policies are typically much more expensive than a traditional car insurance policy. Some small business owners and employees who use their personal cars often try to slide by because they mistakenly think either they are covered or simply think that their business is so small that they will not get caught. These are both faulty assumptions that can have serious repercussions. Even using your vehicle for side-income jobs such as delivering pizzas after your day job can find you in hot water if you have an accident while on the clock and are not covered by your employer’s business insurance. There is often a misconception that you do not need your own business auto insurance policy if you use the company logo on your vehicle when you make deliveries.

Some employers provide commercial insurance for the cars that are driven by their employees. This form of insurance is called hired and non-owned car insurance. Hired and non-owned car insurance can cover the damages that you may cause to another car if ever there is an accident. Some employers provide this liability coverage as a way to prevent their business from being named in a lawsuit if one of their employees is in an accident and does not have the appropriate amount or type of insurance that will cover damages. This may be a cheaper alternative than purchasing your own separate commercial policy.

Commercial car insurance policies and the types of insurance that are available depend on the kind of business that you have. Separate commercial auto insurance can help provide you with coverage when you use your vehicle while working. Not only will the business be protected from liability, you will also protect yourself from potential lawsuits.