If you’re a plumber or electrician running your own business, you probably spend a lot of time traveling between jobsites and transporting tools, equipment, and supplies. There are many scenarios and Plumbing and Electrical Businesses that are not covering themselves properly when it comes to their auto insurance. Knowing when it’s necessary to purchase a commercial auto policy can protect your business and prevent unexpected expenses in case of an accident. Here’s a breakdown of key situations that typically require commercial auto coverage, with examples to clarify when your vehicle might be considered a “commercial auto exposure.”

1. Vehicles Registered Under the Business Name

• If your vehicle is titled and registered under your business name, it is considered a commercial vehicle. This is a clear cut example of a business that is required to carry commercial auto insurance. Personal auto policies do not cover vehicles owned by a business.
• Example: Suppose you own a van registered under “Smith’s Plumbing Solutions LLC.” In this case, you’ll need a commercial auto policy because the vehicle is legally considered a business asset.

2. Vehicles Used Primarily for Business Purposes

• When your vehicle’s primary use is for business purposes, including transporting tools and supplies, it’s more likely to be seen as a commercial exposure. Specifically if your pluming business is transporting tools and supplies, will this be a business auto exposure and you are required to carry a commercial auto policy.
• Example: If you’re an electrician and your truck is loaded with wiring, conduits, power tools, and ladders that you transport daily between jobs, a commercial auto policy is necessary. The risk and liability increase when your vehicle carries equipment essential to your work.

3. Employees Driving Your Vehicle

• If you have employees who drive your vehicle as part of their job, a commercial auto policy is essential. This ensures coverage in case an employee is involved in an accident while operating your vehicle for business.
• Example: Say you’re a plumber with a team. If an employee uses your work van to pick up parts or head to a jobsite and gets into an accident, a personal auto policy likely won’t cover the claim. A commercial policy, however, will.

4. Vehicles Modified for Business Use

• Vehicles that are modified to carry special equipment for business purposes are often considered commercial exposures.
• Example: If you’ve added custom shelving in your van to store plumbing parts and tools or installed ladder racks on a truck, these modifications mean your vehicle is dedicated to your trade. Most personal policies exclude vehicles customized for business.

5. Vehicles Driven for Job-Related Errands

• Even if you use a personal vehicle, driving it to complete business errands often requires a commercial policy, especially if these errands happen regularly.
• Example: You might pick up supplies from a plumbing wholesaler or deliver parts to a jobsite using your personal truck. If you’re in an accident while doing so, a personal policy might deny the claim since the trip was business-related.

6. Vehicles Used to Transport Clients or Employees

• If you use your vehicle to transport clients or employees to and from job sites or meetings, this adds a layer of liability.
• Example: As an electrician, you might drive an apprentice to job sites. While it may seem harmless, if an accident happens, a personal auto policy could deny coverage, leaving you personally liable.

Why Commercial Auto Policies Are Essential for Business Owners

Commercial auto policies provide a layer of protection that personal policies simply do not cover. They’re designed to address higher liability and risk exposures associated with business use, offering benefits such as:

• Liability coverage that protects your business if you or an employee is at fault in an accident.
• Coverage for tools and equipment in the vehicle, which often isn’t covered by personal policies.
• Protection for hired and non-owned vehicles, which is especially useful if your employees occasionally drive personal vehicles for work errands.

What Should You Do Next?

If any of these situations apply to you as a plumber or electrician, it’s time to consider a commercial auto policy. A commercial policy helps protect both your vehicle and your business, offering peace of mind and financial protection. If you’re unsure whether your vehicle qualifies as a commercial auto exposure, reach out to a licensed insurance agent for advice tailored to your specific needs.

A commercial auto policy can be the difference between a minor setback and a major financial burden—make sure you have the coverage that fits your business.