Do you know the real purpose of insurance – any insurance? To cover a loss that the insured cannot afford to bear. If you can afford it, there’s no point wasting money on insurance. If you have a six-year-old 19″ TV set, you probably wouldn’t buy insurance against repairs because if it breaks down, you’d probably just go buy another one. But for most companies, they have to have insurance; they can’t afford not to buy it. But the objective should be not to spend too much money. Nor do you want to adequately insure yourself.
Consider your insurance needs if your business has multiple vehicles. There are generally two parts of your insurance coverage: damage and injury to your property, and damage and injury to everyone else’s. Actually, for your own property, there are also two parts: collision and comprehensive. Collision is when your vehicle strikes something; comprehensive is everything else. If you run into a tree, your collision coverage (minus the deductible) pays for the damage to your vehicle. If a tree strikes your car because it fell on it, or a storm uprooted it, your comprehensive (again minus the deductible) pays for the damage to your vehicle.
As far as what coverage you take for your vehicles, you should consider your options as far as carrying insurance on them. Most people – and companies are just ‘people’ who spend someone else’s money instead of their own – either overpay or underbuy the insurance they need.
For example, if you run a business that does any kind of metal repairs, you can probably do your own body work on your vehicles. Therefore, you might not need to be carrying collision or comprehensive coverage. Or you might consider raising your deductible. Also look at how your insurance covers you: if you operate a taxi service, your insurance may not provide any coverage to you or your drivers unless they are at fault; if someone hits them and they’re injured or one of your cabs is damaged, your insurance may not cover it, they have to sue the other driver.
What you do want to look at are the most important part of your coverage, and the one that is most usually mandatory: public liability. In some states, all you’re required to carry is the state minimum, which might be as low as $15,000. This amount is so low as to be ridiculous. In fact, most common carriers are required to carry at least $5,000,000 in public liability per accident, and in some localities, if you do business with a government agency
