Michigan Taxi Insurance Policy Information
Michigan Taxi Insurance. Taxi services - the ability to hire a driver and means of transport on a short-term basis - have, in some form, been available since at least the 17th century.
Taxi cab companies offer transportation to passengers on public roads to and from their specified destinations. Some also offer courier services that deliver packages and documents.
The taxi company's employees are usually limited to dispatchers, schedulers, and office workers, as most taxi drivers are independent contractors. Passenger pick-up may take place on the street, at taxi stands on a first-come, first-serve basis, or by specific request through the taxi company's dispatcher.
Local ordinances may prohibit a taxi company from declining service to prospective passengers, including those going to or from high crime areas.
In modern times, countless people rely on taxi services on a daily basis, whether because they do not drive their own vehicles or because cabs provide a more convenient means of transportation.
Taxi services exist on various scales, using diverse business models. While taxi companies may own a whole fleet of vehicles (which are then operated by employed drivers) as well as an office space and parking lot, even "solopreneurs" can run a very successful and busy taxi service.
To make it in the taxi business, it is crucial to get ahead of the possible risks you may face and to take steps to protect yourself from the financial devastating that may follow unforeseen, and ruinous, circumstances.
What types of Michigan taxi insurance may help you meet this goal? Find out more in this brief guide.
Michigan taxi insurance protects your taxi cab business from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Why Do MI Taxi Cab Services Need Insurance?
Whether you are the owner and manager of a sizable taxi company or you run a solo taxi service, you will - like any other commercial venture - be faced with a number of hazards. Some of the risks that should be on your radar are of such a universal nature that they could befall any business, while others are more industry-specific; related to either your vehicle or vehicles, or the fact that you provide a service.
MI taxi services that own or rent an office space face the risk of damage to that property, for example, due to acts of nature such as earthquakes or hurricanes, or as a result of criminal acts like vandalism (which includes arson) or theft. Accidents are another example of a universal threat that could inflict severe property loss - think accidental fires or serious plumbing disasters.
In addition, taxi drivers face the risk of road traffic accidents and, when they had a client in the car during a collision, the possibility of being sued is very real. Customers may damage your upholstery, and taxi services also need to consider the threat of crime, as the threat of armed robbery and other forms of violence are a major occupational hazard for taxi drivers.
While you can take proactive risks to mitigate the risks you face as a taxi service, the fact that circumstances beyond your control could easily threaten your financial and physical health remains inescapable.
By investing in Michigan taxi insurance coverage, you can rest assured that you have done everything you can to shield your business from ruin even if you were to be impacted by a major peril.
What Type Of Insurance Do Michigan Taxi Companies Need?
The exact types of coverage a taxi service needs to protect their business depends on numerous factors. A single independent taxi driver will not have the same insurance needs as a taxi company that owns multiple vehicles and an office space, as well as being responsible for employees, for instance.
The location where you are based also plays a role in your Michigan taxi insurance needs. To make sure you are completely covered, it is therefore essential to consult a skilled commercial insurance broker who understands the taxi cab business.
Having said that, taxi services may need the following forms of coverage:
- Commercial Auto - As work-related driving is quite literally the job description of a taxi driver, commercial auto insurance is the first type of policy any taxi service needs. It protects you from financial losses in the event of a vehicle accident, theft, or vandalism pertaining to your own vehicle, third party vehicles, and the bodily injury of yourself and third parties. Due to the high risk profile of taxi services, commercial auto insurance will be more costly within your industry.
- Commercial Property - If you use a dedicated office space to book rides, you will also require commercial property insurance - which covers the costs associated with major perils such as acts of nature, theft, and vandalism that could damage your building or result in the loss of smaller assets such as computers.
- Workers Compensation - Companies with employees will require workers' comp. If an employee sustains a work-related injury for which you could be held liable, it covers their medical expenses as well as any lost wages.
There may be additional Michigan taxi insurance needs in the form of cyber coverage or general liability coverage (if they receive visitors in their office space or a re required by certain locations); these important forms of insurance are merely examples of the types you will need to protect your business. For further details, talk to a commercial insurance broker.
MI Taxi Service's Risks & Exposures
Premises liability exposures are limited because the public ordinarily does not have access to the office and garage. Off-premises exposures from contact with passengers usually come under automobile liability, not general liability.
The contract between the driver and the taxi company determines the extent of its liability for the driver's actions. Personal injury exposures, such as assault and battery, discrimination, or invasion of privacy, may include allegations against the taxi company for negligent hiring and supervision of contract drivers.
Workers compensation exposures vary depending on individual state laws. Drivers are usually independent contractors and are not subject to workers compensation coverage. However, exposure can be significant if the law in a specific state requires that such drivers be covered as taxi drivers work alone, often after dark, carry cash from passenger fares, and cannot generally decline service even to high-crime areas.
Drivers can be injured during hold ups, from altercations with passengers, bitten or scratched by passengers' pets, or in vehicle accidents. Handling passenger luggage and other belongings can result in strains, sprains, and back injuries. Drivers may slip and fall on ice, snow, or water, or trip over curbs.
Vehicles should be well maintained, equipped with two-way communication devices with the dispatcher, shields to separate the driver from passengers, surveillance cameras, a global positioning system (GPS), and safety equipment commensurate with weather conditions. Driver training should include how to deal with violent, intoxicated, or uncooperative passengers.
Mechanics can be exposed to toxic fumes from refueling and repair operations. These should be done in well-ventilated areas. Exposure to asbestos may result from repairing brakes.
Property exposures are from office and dispatch operations. Ignition sources include electrical wiring, heating, and air conditioning systems. If vehicles are stored and maintained on premises, the fire exposure increases due to flammables, including lubricants, oils, degreasers, and solvents. These must be properly labeled, stored, and separated from one another.
If welding is performed, tanks and gases must be handled properly. Welding must be separated from other operations by flash/welding curtains or performed in a separate room or building. Tires do not ignite quickly, but once ignited are difficult to extinguish and leave an oily smoke that permeates the entire area.
Inland marine exposures include accounts receivable if the taxi company offers credit, computers, and valuable papers and records for contracts with drivers. Also, driver logs may be required to meet federal, state, and municipal regulations. Computers and satellite tracking systems may be used to track vehicles and maintain contact with drivers. All data must be duplicated and stored off-site so it can be easily replicated in the event of a loss.
Crime exposures are from employee dishonesty, burglary, robbery, and money and securities. If drivers are independent contractors, the exposure is limited off-premises as they are responsible for arranging their own crime coverage. The exposure is high on premises as drivers return to the taxi company's premises to turn over money collected during their shifts.
Background and criminal history checks should be performed on all employees who handle money. There must be a separation of duties between persons handling orders, deposits and disbursements and reconciling bank statements. Outside audits should be conducted regularly.
Due to the potential for large amounts of cash to be on the premises, alarms and other security arrangements should be appropriate. The timing of bank deposits and routes taken should be staggered.
Commercial auto exposures are high. Taxi companies often own the vehicles and lease them to the drivers, but have limited control over them because they are independent contractors. However, the taxi company can require each driver to have a valid license appropriate for the type of vehicle driven, require satisfactory MVRs, prohibit the use of alcohol and drugs, and require successful completion of driving courses.
Drivers should be trained on how to respond in case of a medical emergency. Random testing for alcohol and drug use should be required. Seatbelts and child safety seats should be required when the vehicle is in motion. Vehicles must be properly maintained on a scheduled basis with records of such maintenance kept at a central location.
Michigan Taxi Insurance - The Bottom Line
To learn more about the exact types of Michigan taxi insurance policies you'll need and how much coverage you should carry, consult with a reputable agent that is experienced in business insurance.
Michigan Economic Data And Business Insurance Requirements
Business owners who are interested in establishing operations Michigan must have a thorough understanding of the state's economy. They should also familiarize themselves with any regulations and limits that state may have in place for commercial insurance.
Any entrepreneur who is thinking about starting a business in the Great Lake State first needs to determine if it's a feasible location for business operations. As such, it's important to have a keen understanding of pertinent details regarding the economy of Michigan, in addition to the types of insurance coverage that are mandatory for corporations that operate within the state.
Economic Trends for Businesses In Michigan
After a long period of stagnant job growth in the early part of the 21st century, MI has been experiencing a steady increase in employment gains. Between 2009 and 2018, the state has enjoyed a period of uninterrupted job growth; the longest stretch of job growth since World War II. According to economists at the University of Michigan. While there has been a slight decline in the rate of job growth, job creation continues and forecasters say will continue for the next two years, into 2021.
In 2018, an estimated 55,200 jobs were created; in 2019, it's expected that 35,800 jobs will be created, and in 2020, economists believe that there will be a total of 39,300 jobs created in Michigan. While that rate of growth is 1.9 percent slower than the job growth rate between 2011 and 2016, it is still a steady increase overall. In total, approximate 683,200 jobs will be created in MI between 2099 and 2020; almost four out of the five jobs that were lost during the early part of the 21st century will be recovered.
While the unemployment rate has steadily improved, it is still above the national average. In March of 2019, the national unemployment rate was 3.8 percent, while in the state of Michigan, it was 4.0 percent. Mid-Michigan has experienced the largest growth rate in the state, and according to forecasters, it looks like that trend will continue, moving forward. Industries that are expected to see the most growth include:
- Energy, due largely to research and development in clean energy
- Food and agriculture
- Transportation and mobility
- Healthcare industry
- Information and technology
In the state of MI, business owners are not legally required to carry liability insurance; but most entrepreneurs opt to invest in a General Liability or Business Owner's Policy (BOP). A commercial auto insurance policy is also required for any businesses that use motor vehicles to conduct any aspect of their business operations. Workers' compensation insurance is also required for any businesses with non-owner employees. While the following forms of coverage are not required, depending on the type of business you operate, they are recommended:
- Data breach insurance
- Business income insurance
- Commercial Umbrella insurance
Additional Resources For Commercial Auto Insurance
Learn about small business commercial auto insurance which includes liability and physical damage protection for vehicles that are used for business purposes.
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The person injured in an vehicle accident may be a child, a wage earning single parent, a brain surgeon, or even a homeless person. The costs of the accident may be relatively small or run into the millions of dollars, depending on the victim and his or her injuries. Do you have the assets to handle such costs?
Trucking operations in this chapter are among the most heavily regulated in the country. All are subject to multiple types of regulation including municipal, state and federal. The regulations are necessary because potential for severe property damage and/or bodily injury is extremely high.
All carry cargo that if not handled appropriately could have serious consequences to the cargo owner and/or the public at large. Those that carry people must prove that they keep their equipment in good condition and that employees operate in a safe, sober manner.
The insurance company pays amounts an insured is legally obligated to pay as damages because of bodily injury or property damage and certain types of pollution events covered by this insurance caused by an accident and resulting from ownership, maintenance or use of covered vehicles.
The obligation to pay is triggered only by accidental occurrences involving vehicles covered under the Business Auto Coverage Form. An eligible pollution event is covered only if it is connected to a covered bodily injury or property damage loss.
It is important that you have the proper Limit of Insurance to protect your operations. This limit is the most the insurance company pays for the total of all damages, including any covered pollution cost or expense resulting from any one covered accident, is the Covered Auto liability limit of insurance on the declarations.
This limit applies regardless of the number of insureds, autos covered, vehicles involved in an accident, premium paid, or number of claims made.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Motor Truck Cargo, Valuable Papers and Records, Employee Dishonesty, Money and Securities, General Liability, Employee Benefits, Umbrella, Motor Carriers Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Mobile Equipment, Signs, Warehouse Operators' Legal Liability, Cyber Liability, Employment-related Practices, Environmental Impairment, Underground Storage Tank, Stop Gap Liability and International Coverages.
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