Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Tool Truck Business InsuranceOperating a business from a vehicle has its own unique challenges that differ from working out of a brick-and-mortar office. When it comes to insurance to provide financial coverage from risks and litigation associated with a business, even tool-businesses operating out of trucks and vans need to be covered.

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An auto insurance policy can cover a lot of risks for a business vehicle, but when the business actually operates out of the vehicle insurance providers typically draw a line.

Auto insurance policies are designed to cover liability for a vehicle itself. Some ambiguity is allowed for personal belongings inside a car, but not to the extent of an expensive tool inventory.

Additionally, business transactions that are associated with tool inventory, distribution, warranties, and sales have nothing to do with automobile operation. As a result, an auto insurance provider will clearly limit any coverage to exempt any such activities from the vehicle’s coverage. Again, the provider is making sure the coverage provided relates to the use of the vehicle and not to additional activities beyond just driving.

Business Insurance as a Solution

Why You Need Business Tool Truck InsuranceBecause of the gaps in coverage with auto insurance, business insurance is an ideal solution for a business selling tools from a commercial van or vehicle. Business insurance is designed to protect a business from reactions by customers unhappy with the business’ performance or goods sold.

Selling tools from a vehicle is essentially operating a store front on wheels. Just because the business rep moves around in a car, rather than sit at a desk, doesn’t change the nature of the activity involved. In this respect business insurance fills the coverage gap missing when just relying on auto insurance alone for a tool distributor on wheels.

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Litigation is Expensive

Operating a tool business distribution by vehicle without business insurance in place can be done, but it is highly risky. Lawsuits don’t need to be based on accurate or real situations. They can be filed by a customer who is just plain disgruntled, or someone looking to get out of a contract with their tool distributor.

Regardless of the reason, when the lawsuit occurs, most businesses don’t necessarily have a separate bank account to pay for the expenses. And lawyers are not cheap.

The average cost to retain an attorney tends to be around $300/hour.

Monthly retainers typically charge $2,000 to $3,000 a month for ongoing legal services for cases expected to last for a while.

Business insurance provides a financial safety net when a business is sued. A provider examines the type of business involved and then gauges the risk of litigation that could stem from the business’ activities.

The premium is set with the provider’s evaluation. In exchange for this payment, the business then can rely on the insurance provider to pay for legal defense when the business gets sued, assuming the lawsuit claim is associated with a covered business activity.

Buy Business Tool Truck Insurance

Interacting with numerous customers without business insurance is a gamble that grows riskier with time and more clients. While it can be done with luck, skill, and proactive customer service, the more business transactions that occur increase the probability that one will go sour. When it does and triggers a lawsuit, the ramifications could bankrupt an unprepared business with the legal costs. Learn more about lawsuits filed against small businesses here.

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Cost and Research

Many vehicle-based tool distribution businesses tend to be franchises or small businesses that are very cost-conscious. They are typically not interested in spending on a business where they don’t need to. Specialty insurance can seem like such a cost. An article in Entrepreneur discusses the challenges of a distribution business here.

However, business insurance doesn’t have to be a major money loss for a business.

Quotes can be obtained to get a rough idea of cost and then refinement can occur working directly with an agent. A tool business new to dealing with this kind of insurance doesn’t have to contract with the first insurer that comes along. In fact, performing a bit of window shopping and comparison work can drive prices down as agents become aware what their competition offer for the same coverage scenario.

Adjust as the Business Continues

Think About Buying Tool Truck Business Insurance

Additionally, a tool business doesn’t have to stay set with the same provider forever. Business insurance does take a bit of customizing as the best policies are unique to the businesses they cover.

However, a tool business owner should look and receive new quotes from competing insurance providers at least every two years to see what the competition offers. This can prevent getting locked into one insurance provider for too long, spending on the same insurance coverage that can be obtained cheaper elsewhere.

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Insurance Brokers

For tool businesses that aren’t finding what they need through general insurance provider companies, an insurance broker may be the right solution. Brokers work independently rather than for a particular insurance company. In this respect they can craft a unique insurance plan for a tool distribution truck business by consolidating a number of different policies from different companies into a hybrid product. Such a solution is far better for a business than trying to fit a predetermined coverage package that doesn’t suit that company’s specific needs.

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