Do I Need Commercial Auto?

Discussion in 'Business Operations' started by steviepowers, Feb 3, 2006.

  1. steviepowers

    steviepowers LawnSite Member
    Messages: 37

    Do I need Commercial Auto on my truck and trailer? I'm small with just a handfull of yards. No business identification on truck or trailer. Just don't know if I will be covered by my personal insurance on the vehicle should anything happen, or if they will say I was hauling a mower to do a job and make money so we will not cover.
  2. heather lawn sp

    heather lawn sp LawnSite Senior Member
    Messages: 681

    Having spent 7 years as an insurance claims examiner & adjuster followed by 16 years landscaping and plowing I might be able to give you some insight. Generally they could deny coverage based on the fact that you withheld important information (that your personally insured vehicle is being used commercially). Mostly they will just make you pay the difference between the personal use and the commercial use and proceed with any claim submitted from there.

    You biggest problem would be operating your business with out the comprehensive general liability policy (The CGL) commonly called the business insurance. fer instance: if your mower picks up a rock and flings it into a kid's face you could be out of business for the rest of your life. A court judgement against you will follow you around.

    This should be you biggest question do you have a CGL?
  3. grass disaster

    grass disaster LawnSite Silver Member
    Messages: 2,751

    ok i have a question for you.

    i'm a part time opperation

    i have commercial general liabilitry coverage
    it covers
    1m general aggregate limit
    1m product completed operations
    500k personal & advertising injuries
    500k each occurance limit
    100k damage to premisis
    5k medical exp

    it also covers my equipment
    i guess it doesn't say anything about my truck????????
    this plan is about $700 a year i think

    my ins man says i am kinda at risk not having the full blown commercial ins for my truck and trailer

    any comments on this? should i up my coverage you think?

    ????????am i up sht creek if i get in an accident??????????

    i should mention i don't have any lettering on sides.
  4. heather lawn sp

    heather lawn sp LawnSite Senior Member
    Messages: 681

    just as an aside, the lettering doesn't really matter so get that out your head.

    the test is

    what is it used for?

    As mentioned above, if you don't have coverage for a commercial vehicle you don't have a contract of insurance with them. It may be the same truck but it is the use and hence premium that matters to them.

    eg"we didn't insure that vehicle, sir"
    is not what you want to hear

    THAT VEHICLE refers to 'commercial use vehicle' not the steel 'n' rubber 'n' plastic that you think of as a vehicle.

    same 3/4 ton vehicles side by side are different to an underwriter at an insurer if they have different uses

    THAT said, they might cut you some slack and just change the premiumto the corrected amount to keep the business, BUT they are none too thrilled by insureds that lie to them
    (underwriters minds are a little twisted by too many years on a desk)

    They think. . .

    where used?
    who uses?
    what use?
    and then . . . what is it?

    also get it out of your mind that brokers are omnipotent. What the insurer says, goes, unless overturned in court

    every so often I still have to educate my broker on some fine point of insurance
  5. drsogr

    drsogr LawnSite Bronze Member
    Messages: 1,275

    I told my insurance agent that I used my truck 50 percent personal and 50 commercially. She said it didn't matter as to which insurance I had until I got over 50 percent. She then proceeded to ask me if I had my company name on the truck. I told her I did, she said then when need to change your coverage right away.
  6. echovalley

    echovalley LawnSite Member
    from CT
    Messages: 91

    This is why you guys with NO GL insurance,NO workers comp,NO commercial auto policy,NOT registered as a contractor can do $50 lawns for $20 bucks.16 years in the business as a professional And losing more and more work to anybody with a trailer hitch on there car. :realmad:
  7. drsogr

    drsogr LawnSite Bronze Member
    Messages: 1,275

    Did you start off with all of those? Most people don't realize what they need to start a business. That why you should educate them, or deal with them being your competitor. I have went through and made sure I have everything I need.
  8. scagwildcat

    scagwildcat LawnSite Senior Member
    from nw. ct.
    Messages: 507

    SAME HERE ECHOVALLEY!!!!!!!! IVE EVEN HAD PEOPLE FOLLOW ME AROUND TRYING TO STEAL WORK.......... i never have a problem with some one trying to make a living, but pls people do it legal, most things said about the fly by night lco's are not all bad things, think of it in a way as an eye opener, yes your cheaper, yes, no over head, but like stated above, what happens it you hurt someone??? and now for the rest of your life you work 80hrs a week, just to give it to the person you hurt, and no, you will never be self employed again, so ask your self , is the extra money you save by not being legal, worth it????///?
  9. JohnsonLawn

    JohnsonLawn LawnSite Senior Member
    Messages: 400

    My policy states my vehicles are for business use. My dump truck is over 10,000 gvw, so I have a commercial policy on it. I am sure that policies differ greatly depending on your state.
  10. steviepowers

    steviepowers LawnSite Member
    Messages: 37

    Yes, the lettering does matter. For one, Municipalities recognize your vehicle as commercial if you have lettering on it or your trailer. This makes you subject to DOT guidelines for commercial vehicles (break away hitches, brakes, lighting, etc.) Once you have this lettering, you are fair game to be pulled over and inspected by commercial enforcement. This will happen at some point, and you better be in compliance. Insurance also views the world by these type of guidelines. I don't know it all, but I have a nice background in insurance work as well. The lettering matters, it is a big step toward big commercial... so get that out of YOUR head Heather Lawn.

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