Drive in a Risk-free Zone
The Association for Safe International Road Travel reports there are more than 38,000 roadway fatalities each year. Additionally, 4.4 million people get seriously injured from car accidents and require medical attention. As a livery service provider, you are at a higher risk of getting into a car accident due to so much time on the road. Whether you accidentally hit another vehicle on the road or another vehicle hits you, you may have to bear large expenses. That’s why you need livery insurance.
In this article
Understanding Livery Services
Also known as for-hire car services, livery vehicles offer pre-arranged transportation services. The route, customer, and prices are pre-determined. Taxis, rideshare, limousines, black car, airport shuttles, etc. are all examples of livery vehicles.
What Is Livery Insurance?
Although the insurance falls under commercial auto insurance, they differ. A standard commercial auto policy covers your vehicle when used for business purposes such as transporting your employees. However, your auto policy might not cover your auto if used for livery services. It depends on your policy coverage and the policy provider. Nevertheless, livery insurance covers you explicitly from losses during for-hire services.
Who Is Livery Insurance For?
Livery insurance is for anyone providing the following services:
Black car/limousine services
Limousine services offer pre-scheduled luxury transportation. Such service is also known as a black car and limousine service. The clients specify in advance a schedule for pick up and drop off. If you offer a limousine service, livery insurance can cater to your needs for risk management.
A regular taxi service works on a hail-and-ride approach and charges transportation fees based on taxi meters. Taxi insurance provides coverage to such vehicles. Visit lajolladetail.com/. However, the insurance can provide coverage to your vehicles when used for pre-arranged transportation services. Nevertheless, taxi insurance does not cover special vehicles like airport shuttles, sightseeing tour buses, etc.
Your personal auto policy does not extend coverage if the insured vehicle is used for reasons other than personal purposes. If you are using your vehicle for livery services, a livery insurance policy can cover you from possible losses to you and your vehicle.
Non-emergency medical transportation (NEMT) service
NEMT vehicles transport people to and from medical treatment facilities. The clients schedule transportation beforehand. However, the NEMT service doesn’t include ambulance and other emergency vehicles.
With livery insurance, you can feel safe against a myriad of risks.
Coverages Of Livery Insurance
Commercial general liability insurance
Commercial general liability insurance protects your business from costs due to:
- Property damage to a third party due to your or your staffs’ negligence. For instance, if you hit a van and caused some dents, you would be covered.
- Bodily injury to the third party. In the previous example, if the van driver is injured, the medical costs, ambulance fee, rehabilitation expenses, etc., are covered.
Employment practices liability insurance
Employment practices liability insurance protects you from claims filed by your employees. Such suits can be on the grounds of wrongful termination, sexual harassment, discrimination, etc. It helps you meet the financial costs related to such lawsuits.
Workers compensation insurance
If your business employs more than two employees, you need workers compensation insurance coverage (except in Texas). It helps you provide benefits to your employees following a workplace injury, disability, or death. In return, the rights of your employees to file a suit against you are waived.
Collision and comprehensive coverage
Under collision coverage, your insurer repairs or replaces your car in case of damage due to collision. The collision could be with another vehicle, fire hydrant, tree, fence, etc. On the other hand, comprehensive coverage offers you protection for loss due to factors other than collision. Such factors can be fire, theft, vandalism, storm, or even a falling tree.
Endorsements help you add to, remove from, or modify your livery policy. Hence, understanding endorsements can help you make an informed decision. Possible endorsements include:
- Uninsured/underinsured motorist: provides coverage when the third party has none or not enough.
- Accessories: protects equipment installed in your vehicle, such as communication radio, odometer, etc.
- Towing: covers the cost of towing when your vehicle breaks down.
- Collision deductible waiver: waives your insurance deductible if the driver is at fault.
Exclusions of Livery Insurance
Livery insurance does not cover you from every kind of loss. Such exclusions are:
Typically, a livery policy protects you from losses due to theft. However, you may have to bear costs if the theft occurred due to your negligence, such as leaving keys in the car or leaving the vehicle with its window open.
Livery insurance compensates you for loss events while transporting people. However, if you get into an accident while delivering goods, your insurer may refuse to reimburse you. Since a livery vehicle’s primary job is to transport people, use of the vehicle for any other purpose might make you ineligible for compensation.
Driving outside the region
Livery insurance varies state by state. Hence, to have your insurance cover you, you can only provide services within the stated region. Should you get into an accident while operating outside the stated area, your insurer may not compensate you in the event of a loss.
Talk to your insurance provider and understand your coverages and exclusions in detail. The coverages and exclusions differ as per your needs, your insurer and the state where you operate.
Cost of Livery Insurance
The cost of your insurance depends on various factors such as:
Type of business
The cost of your insurance significantly depends on the kind of livery service your business offers. For instance, are you operating an airport shuttle for airport pick-up and drop-off or a limousine for parties?
Where you operate
As you branch out of your area of service, the insurance rates will increase. Remember, policies may differ according to state regulation.
People or businesses with a good driving history could indicate fewer chances of insurance claims. Hence, insurers can offer you a discount.
Limits and deductibles
The policy limit is the maximum amount of coverage that your insurer provides. On the other hand, a deductible is an amount you’ll pay at the time of claims. The premium is greater for high policy limits and low deductibles.
Type of vehicle
As a rule of thumb, damage to a high-value vehicle entails a higher loss amount. Therefore, the cost of insurance is high and vice-versa.
Businesses that have been providing livery service for a long time are deemed as dependable. Your insurer might offer you discounts based on your experience in the industry.
Can I use commercial auto insurance to cover my vehicle used for Uber or Lyft?
It depends on your insurer as well as the policy you have. Hence, while purchasing the insurance, talk to your insurance provider and confirm the coverage for Uber or Lyft.
Is the minimum livery insurance requirement the same in all states?
The legal requirement for livery insurance depends on the state where you operate livery service. For instance, the New York Taxi and Limousine Commission mandates you to maintain coverage of at least $100,000 per person/$300,000 per accident, if you are operating in New York.
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