When you start a company, there are so many exciting thoughts that run through your mind. You have visions of a successful and profitable business. You think about how you are going to change the industry you have entered. You can buy your mom a house and your dad a car. The responsibilities of company work are in the distant future, or so you think. Commercial truck insurance costs can really weigh down your business. There are so many things to think about when you are operating a company, especially one in its infancy. Inventory is crucial. Design of the product and getting customer satisfaction is important, and so is getting the items to the people who bought them.
You need to evaluate the potential downfalls of running a company before you can take off. Figuring these things out is a mixed bag, depending on the experience of the entrepreneur. You need to brainstorm the expenses that could crop up.
This means you need to think about commercial truck insurance if you have a delivery-heavy business, but you might need some help on what to purchase. We’ll cover the best ways to find cheaper rates for your trucks and whether you can use your personal policy for company business.
What is the difference between personal and commercial insurance?
Many people who run small businesses want to know the differences between personal and commercial truck insurance. Why can’t they just use their personal policy for their company? What happens if you don’t take out commercial insurance?
Commercial insurance covers you in any accidents that may happen while delivering your goods. It also covers other trips needed to run your business.
Commercial insurance is taken out to drive the vehicles under the policy. You need extra protection for those risks that personal policies will not cover. Driving to work to sit behind a desk and work your accounting job does not need a commercial insurance policy.
If you’re driving 200 miles in a day to deliver cookie dough to customers all over the Seattle metro area, you’re going to need a good commercial policy. You need to drive to run your business and make money. Driving to a workplace is a convenience, not a requirement. You could always carpool or go on public transportation to get to your office space.
Delivering a lot of product to your customers is going to need protection for the goods. Commercial insurance will cover damages or losses to your products if there is an accident. This will prevent you from having to scrounge up money to remake all your products if they are sprawled on the pavement and ruined after a wreck.
Luckily, the type of product you are delivering can cheapen your commercial insurance policy. The previous example of food or other perishables is considered inexpensive. Having to replace desserts is a lot more manageable than having to replace thousands of pounds of jewelry.
If you know you may not be able to afford the extra costs that come with delivering expensive items, think about starting a company that sells smaller, more financially insignificant merchandise. You can scale up toward the more lucrative items as your business becomes more profitable.
The last main difference between personal and commercial insurance is that you should take out a policy that covers many vehicles when they are for commercial services. You can tailor your insurance policy toward a fleet of trucks. When you buy in bulk, you get discounts. The average price per vehicle is going to be cheaper for a fleet of 100 trucks compared to 15.
How to Get Commercial Insurance Discounts
What if you can’t buy fleet insurance or ship less valuable products? How can you get discounts on a single commercial truck?
You have to buy a truck that has cheaper rates. The Chevy Colorado averages only about $21 a month for liability rates, nearly a $10 savings from a RAM 150.
If it is possible, it’s smart to buy a truck for commercial use based entirely on how much the insurance will cost. Colors and extra features are all better left for your personal vehicle.
When buying for commercial use, focus only on how the vehicle will effectively get your products from one place to another and save you money in the long run. It’s hard not to think of the amenities when buying a vehicle, but it’s going to waste a lot of money if you prioritize style over substance in this instance.
Alternatives to Delivering for Your Business
If buying commercial insurance is a hardship that can’t be overcome when you start your business, think about shipping alternatives. Going through the postal service or a delivery company like FedEx can save you money depending on the type of product and the number of items being delivered.
You also need to consider whether your choice of delivery service is going to satisfy your customer base. In recent years, so many consumers want to track exactly where their package is. Improving your last-mile delivery process is important to get a good reputation for your company.
If you choose to make the deliveries, make sure the commercial insurance isn’t the only thing you are taking into consideration. It can be pricey to integrate new software into your business model. You may also need to build a better experience for your customers. New technology helps inform businesses of the most efficient solutions to faster shipping times.
Consumers have to know their purchases are going to arrive safely and on time, and it is a lot for small companies to keep track of. Look at your options and ask other small business owners in your area how they handled these responsibilities.
You may think that other companies will be hesitant to help a competitor, but shipping is a universal problem for small businesses. Helping each other out will push small businesses forward for everyone.
No matter what route you decide to take, getting things like insurance for your commercial trucks is always going to be better than ignoring the issue. Try to buy a fleet that includes many of the cheaper policies listed above, and enjoy the process of growing your brand.