Commercial Auto Insurance Minimum Requirements in Arkansas

Determine Whether You Need Commercial Insurance

Commercial insurance is not necessary for every business. If you are a sole proprietor who only uses your personal vehicle to make occasional business trips, you most likely do not need a commercial auto insurance policy. However, if you own multiple trucks with special equipment that are regularly driven by several different employees, commercial insurance becomes a key factor in the success of your business.

Here is some information you may wish to use when deciding if commercial insurance is needed for your Arkansas business:

• How many vehicles require proof of coverage.

• If any of the vehicles have business equipment attached.

• The primary purpose of the vehicles.

• The registered owner of the vehicles.

• How many people drive the vehicles and their relationship to your business.

• If the limits on your personal auto policy would be enough to protect your company assets in the event of a lawsuit.

If you need more help determining whether you need commercial coverage, contact the Office of Motor Vehicles (OMV).

Determine the Required Amount of Coverage

Minimum liability insurance in the state of Arkansas are as follows:

• $50,000 per accident

• $25,000 to cover property damage

• $25,000 per person for bodily injury

Of course, there are many good reasons to consider purchasing more than the minimum amount of coverage. In fact, it's not uncommon for experts to recommend $500,000 to $1 million in liability coverage for business owners with significant assets.

You can also add separate endorsements to a policy to provide protection for medical payments, rental reimbursement, towing and labor, and auto loan or lease gap coverage. And, there is the option of a business umbrella policy to provide coverage for property damage or bodily injury costs after your liability limits have been exceeded.

Contact the OMV if you need more assistance figuring out how much commercial coverage to purchase.

Purchase a Commercial Policy

Smart business owners always shop around when making major purchases, so it should come as no surprise that experts recommend you get at least three quotes before purchasing a commercial auto policy.

Prices can vary substantially among carriers, especially if you consider working with one of the insurance companies that specialize in providing insurance to those who need to cover multiple commercial vehicles.

Electronic Reporting

Insurance carriers should automatically notify the Arkansas OMV of your coverage as part of the state's Insurance Verification and Notification Network Program. All companies doing business in Arkansas must file electronic reports at least once per month, although some companies choose to report changes in policies on a weekly basis.

As you might expect, reporting errors do sometimes occur with this system. If you receive a notice from the OMV that your registration has been canceled for lack of insurance, you'll need to contact your carrier to fix the mistake.

For commercial policies, keep in mind that the name of the company the insurance carrier is reporting must exactly match the vehicle registration for the company’s vehicles to show insurance coverage. Commercial policies are reported as one policy per company name, but the OMV makes no assumptions about coverage for companies that have similar sounding names.

Proof of Insurance and Financial Responsibility

When you purchase a commercial auto insurance policy, you'll receive a card for each vehicle. Keep this card in the vehicle's glove compartment so your or your driver(s) can present it to a law enforcement officer upon request.

Penalties for Failure to Maintain Financial Responsibility

The OMV is automatically notified within 30 days of a lapse in insurance coverage. If you have no proof of insurance, your vehicle registrations will be suspended and you will need to provide proof of financial responsibility before they can be reinstated.

However, the more significant risk for business owners who fail to maintain the proper insurance coverage is the chance a lawsuit from a single motor vehicle accident could result in a settlement large enough to push an otherwise successful company into bankruptcy.