Many small business owners use their personally owned vehicles for their business activities.  At some point, they might find that a Personal Auto Policy excludes some activities or that they don’t have the coverage need.

First, you need to understand that a Personal Auto Policy (PAP) is not designed to cover some business uses and exposures so it contains exclusions you should be aware of.

Business use is excluded

A Personal Auto Policy normally excludes all coverage for business use (except farming and ranching), but, the exclusion does not apply to “private passenger autos, pickups, motorhomes and vans, or trailers used with one of these vehicles”.  The intent is to only exclude the use of larger commercial type vehicles and trucks.

Specific use exclusions

A Personal Auto Policy excludes all coverage if you are in the business of using your personal auto:

• As a public or livery conveyance (for hire doing the public pickup and delivery of people or goods). 
• New exclusion in many PAP policies: To pick up or deliver newspapers or magazines, food (like pizza) or any products for the purpose of compensation.

Generally speaking, unless specifically excluded, a business owner of a sole proprietorship can use their personally owned private passenger auto or pickup insured under a Personal Auto Policy (PAP) and have the coverage you select. 

When you need a business auto policy

However, at other times, you will need a business auto policy. These instances can be if:

• Your business is a legal entity like a legal Partnership, Corporation or LLC, or
• You have employees who also may drive your vehicle(s), use multiple vehicles, or need $1,000,000 liability limits, then you should have a Business Auto Policy. 

Get free advice and quotes for this coverage

Contact your Agent at American Insurance or call our office in Lewiston at (208) 746-9646 or in Moscow at (208) 882-8544 for more information about this coverage.

Related articles

Read more articles about Business Auto risk management online here.

Read more articles about business liability online here.