by Jason Wiesner
Are your wheels insured properly?
A critically important, but often neglected, aspect of your business insurance needs is your commercial auto insurance coverage. Many of the fabricare professionals who will be reading this article may run a dry/wet clean- ing plant, a depot or pick-up store, a coin laundry, or commercial laundry facility. You may be operating any- where in Canada from scenic British Columbia to beauti- ful Prince Edward Island, but the common thread that connects all of you is that practically every one of you has a commercial auto insurance exposure that needs to be properly protected. Are you thinking, “I don’t do deliveries and I have no
company trucks so this doesn’t apply to me.” Before you turn the page, think about this. Do you write off any part of your auto insurance on your personal or corporate tax returns? Do you ever use your car to go to the bank or pick up supplies for your business? If you answered yes, read on. If your auto insurance policy is not set up cor- rectly, you could be faced with your tax deduction being refused by CRA, or worse – an insurance claim being denied. Auto insurance is a provincially regulated product and
there are significant differences in auto insurance policies as you go from province to province. I will focus on some of the common elements that apply to everyone across Canada.
CASE STUDY 1 Joe runs Super Clean Dry Cleaners located in Midhurst, Ontario. Late one Friday afternoon he gets a call from one of his drivers. There has been an accident. His driver made a left-hand turn and was hit by another truck. He was charged with Unsafe Move and is at fault for the accident. The brand new Sprinter van they bought last month is a complete writeoff. Not to worry, they have insurance. Heck, they even bought a waiver of deprecia- tion endorsement so he will get the full value. Everything is OK, right? Wrong. Unfortunately, his driver had received an
impaired charge two weekends ago and his licence is sus- pended. The driver was too embarrassed to tell Joe about it, not to mention he needs his job. He took the chance and continued driving at work. As a result of this, the phys- ical damage to the brand new $50,000 van is not covered because one of the conditions of the auto insurance policy is that all operators must have a valid driver’s licence.
CASE STUDY 2 Cynthia, the controller for Crisp and Sharp Uniform Rental and Laundry located in Missis- sauga, Ontario, is shopping around for a better price on the insurance coverage for their 25-vehicle fleet. She knows they have had a few claims and she wants to make sure that they are getting the absolute best price. She puts together a list of their claims and provides their fleet details to an insur- ance broker who specializes in the fabr icare indust ry. He reports back to her two weeks later that most insurers are refusing to provide quotations because of the $500,000 claim on the insurance history that she forgot to tell him about. “How is that possible? We
never made a claim for that!” She is correct. Crisp and Sharp never made that claim. It was an accident benefits claim made by a driver they fired three years ago but forgot to remove from their insurance policy. The ex- employee was a passenger in a friend’s vehicle and was very seriously injured in a motor vehi- cle accident. Because the ex- employee didn’t have his own insurance pol icy, coverage comes from any policy he was listed on first, before turning to the insurance policy of the vehi- cle he was travelling in. This is a unique aspect of the Ontario Auto mobile Insurance Policy.
BE SURE YOU HAVE IT COVERED
Keep the following in mind when reviewing your auto- mobile insurance program:
• Deal with an insurance pro- fessional who specializes in commercial insurance.
• Always make sure that the named insured on your insurance policy matches the ownership for ALL of your vehicles. If you have some in your personal name and some in your corporate name, this needs to be addressed.
• Always immediately delete any drivers from your insur- ance policy if they are no longer employed by you. Conversely, always report any new drivers.
• Always disclose all activities that you use your vehicles for, in writing, to your insur- ance broker. If any opera- tions change, advise them immediately. Non-disclosure of any activity, or material fact, can potentially result in the denial of a claim.
• Set up a regular program to review the motor vehicle records of all drivers on your insurance policy. Consider doing this every three to six months. This will cost you a few dollars, but that cost is much less than the inconven- ience of an uninsured claim.
• Always report any changes to the vehicles you own. Immediately report newly acquired vehicles, as well as the sale of old ones.
• Review your insurance cov- erage in detail with your insurance professional at least once a year.
The bottom line is that, even though you pay premiums for fleet or vehicle coverage, it is not a hands-free arrangement. You need to pay attention to the ‘maintenance’ of your insurance coverage – all your coverage, not just fleet – to be sure you are keeping up-to- date with changes. Set-it-and- forget-it is not applicable to insurance. Add it to your ongo- ing maintenance program for the equipment that makes it possible to run your business. An insurance loss can be just as devastating as equipment that doesn’t perform.
Jason Wiesner is an insurance pro- fessional with Wiesner Insurance. He can be reached at 905-451-4205,
jason@wiesnerinsurance.com or
www.wiesnerinsurance.com.
2014 July/August FABRICARE CANADA 29
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