As a business owner, we know that there are many factors you have to consider when properly insuring your business and employees. This is especially the case if your business has expanded to include delivery, company cars, or other auto-based services that need to be covered through a commercial auto insurance policy.
Since protecting your employees and company assets on the road is now one of your top priorities, it’s important for you to understand how your policy will have you covered. Luckily, Berry Insurance has partnered with countless businesses across Massachusetts and New England, ensuring business owners and their employees have the best coverage for their operations.
If you’ve hired young drivers or have employees with teen drivers of their own, you may be curious to know how/if they can be covered and how it will affect your policy. In this article we’ll break down how children and young drivers are rated on commercial auto policies, and how they can affect your policy.
Does my commercial auto policy cover youthful operators?
If you’ve recently hired young drivers for your business operations or are supplying a company-owned vehicle to a young driver, then whether they can be added to your business auto policy will depend on the policy of your current carrier. However, if your carrier allows youthful operators on your policy, they are likely to affect the overall premium of your policy.
For insurance purposes, any driver under the age of 25 is considered to be a “youthful operator”, as it generally takes 6 years of driving experience to be seen as an experienced driver by insurers.
So, just like adding a new teen driver to your personal auto policy, having youthful operators on your business policy can affect the way your insurance provider will rate your policy.
How will youthful operators affect my policy?
Due to the perceived risk of insuring young drivers based on their inexperience and statistics surrounding young drivers causing more auto accidents, you will likely see your premium increase when looking to add youthful operators onto your business auto policy.
The exact amount you can expect your premium to increase will depend on your business operations, vehicles, and more detailed information on each driver you’re looking to insure. For a comprehensive breakdown of everything that influences the price of your policy, check out this article: How Much Does Commercial Auto Insurance Cost in Massachusetts?
However, do note that this price increase is typically not permanent, as your premium will decrease each year as the youthful driver gains more experience behind the wheel.
Are employees' children covered by my business auto policy?
If you are supplying a company owned vehicle to employees that they use outside of work hours, you should be aware of how it covers them and their family.
While commercial auto policies will cover employee use during work hours, outside of work hours would need to be covered by the employees own personal auto if they are named as an insured or through a named non-owner policy.
Businesses can also offer employees additional coverage by adding the drive other car endorsement. Drive other car coverage is an available endorsement onto a commercial auto policy which essentially provides personal liability coverage to the driver of the commercial vehicle when driving for personal use. While this endorsement may extend coverage to an employee's spouse, there will often be restrictions on youthful operators.
So, teen drivers of employees likely will not be covered under a commercial auto policy, as youthful operators are generally seen as higher risk drivers. Because of this, these young drivers will need coverage through their parents personal policy - not your business’s policy.
Insuring the right drivers for your business
With many businesses hiring young drivers for their delivery services or business operations, it’s important to know what you can expect adding them to your business’s insurance policy.
As driver’s experience and history is one of the most important factors that insurers will look at when rating the premium of your commercial auto insurance policy, choosing the right drivers is a key part of the hiring process. So, before deciding on a driver, read our guide on how choosing the right drivers will affect your commercial auto policy.
Interested in learning more about when you should be updating your commercial auto policy? With everything from new vehicles to new garaging locations, learn when you should call your agent on your expanding auto operations: When You Should Update Your Commercial Auto Insurance Policy.
