When writing a business plan, understanding vehicle insurance can play an important roll in the operating expenses of your business plan. Vehicle or commercial insurance can grow very rapidly with the size of the delivery fleet and it is important for the business planner to understand that as the business grows, so shall the cost of these vehicles.
There are many different ways to insure vehicles depending on the way the company is structured. As well, if you have a business such a pizza delivery, many companies will give the driver a per-trip compensation and make them carry their own insurance on the vehicle and claim it as non-commercial use.
Businesses that most likely need to consider these insurances in their business plan are food delivery services, lined services, trash businesses, hauling and transport companies, logistic companies, freight businesses and importers, electrical companies, contractors with people using their vehicles for business purposes, courier services, personal mail delivery, business plan writers traveling to see clients, and more. Anytime the car or truck can be used for a commercial purpose, this insurance should be considered.
Many of the business plans we write consider these insurances and fixed percentage of income that will grow as 1) more vehicles are added, and 2) more risk is incurred. Depending on the type of business, it is important to make sure these line items are detailed and put to the forefront of the profit and loss statement. Leaving this important line item out would be a major oversight when viewed by possible investors.
Don't struggle with it to the point that you are frustrated—let us help you out. Contact us if you have any questions on how to properly calculate the commercial insurance portion of your business plan.