Does Business Insurance Cover Rental Cars?
The question of insurance is an important issue when renting a car. Whether it is for a business trip, a tourist trip, a weekend, or for an employee on a business visit, it is necessary to make sure that the car is covered by insurance. Contracted with a private individual or a professional, it will be necessary to be very attentive to the slightest detail of the terms of this contract to claim compensation properly.
Jeffrey Johnson, Managing Editor & Insurance Lawyer explains: “The term business insurance encompasses the many different types of insurance available to protect businesses, business owners, and employees of businesses. Obtaining insurance for a business and in our case a Business Automobile Policy (BAP) is an investment that will help protect your business and your livelihood”.
So, what is a Business Automobile Policy (BAP)? and how it can cover rental cars?
According to Investopedia a business automobile policy (BAP) provides coverage for a company's use of cars, trucks, vans, and other vehicles in the course of carrying out its business. Coverage may include cars owned or rented by the company or employee-owned cars used for business purposes. A BAP covers both liability and damage, and it’s also known as Business Auto Coverage Form (BACF).
A BAP generally offers:
- Liability coverage: protection for physical injury to other persons or their property because of an accident related to your covered car including legal defense cost or expense.
- Comprehensive coverage: deals with damage from any cause other than collision.
- Collision: takes care of the damage due to crashes with another object or the vehicle overturning
- Rental car coverage: if you ask if business insurance covers rental cars, here is the answer: this option helps to reimburse the rental company for income it loses because the car is out of use. Also, there may be limited coverage for injury or damage that you cause to others while using a rented car anywhere in the world.
Understanding Business Automobile Policy legally:
A business automobile policy provides compensation for any company that uses a car that drives on public roads. BAP coverage is chosen differently for each car insured, and different transports operated by the same company can hold different quantities and forms of coverage.
Rental companies must by statute, have the minimum amount of liability insurance coverage provided by the state; this sometimes does not provide adequate protection. Non-car-owners who are regular renters have the option of buying a policy of non-owner liability that can provide the required extra liability.
Reasons to reject a claim compensation for rental cars:
As in the case of a classic car insurance, exclusions of guarantee are provided for the Business insurance for a rental car. In these circumstances, the lessor reduces the amount of compensation or refuses it altogether.
- Circulation outside the territorial limits (department or country not authorized).
- Failure to drive or failure to comply with the Highway Code (driving without a valid driver's license, speeding, etc.).
- Driving under influence of narcotics or alcohol.
- Transportation of goods or persons not adapted to the vehicle and/or not authorized by the contract (public or paid transportation).
- Transport of illegal or dangerous products.
US legal recommends that company cars must be insured, just like cars that are intended for personal use. Car insurance is often treated separately from other property and liability coverages. Also, experts recommend that business owners be sure to list all employees on the insurance policies for company cars. In order to settle the car accident claim and determine needed coverage and obtain the most favorable claim compensation.
So, don't hesitate to ensure your business with a good car rental insurance which will protect you against any damage caused and which will protect your professional goods against breakage or theft as well as your premises against fire, water damage and other natural disasters. Also think about a special car rental insurance for business interruption to prevent a possible loss of turnover.