If you’re a small business owner wondering, “How does commercial auto insurance work?” we can help. Commercial auto insurance is a type of auto liability insurance designed for businesses who own and operate company vehicles day-to-day. This auto insurance coverage works similarly to your personal auto insurance policy, but it accounts for the broader range of risks that businesses face while on the job.

employee loading vehicle

A key part of business management is making sure that your company is protected from risks that could financially devastate your business. Commercial auto insurance can help you do just that by covering costs if you or your employees get into a collision while driving a company-owned car.

What Is Commercial Auto Insurance?

Commercial auto insurance, also known as commercial car insurance, helps protect your business if you or one of your employees gets into a car accident while driving a company vehicle for business purposes. This business insurance coverage can help pay costs if there’s physical damage to property or medical expenses related to the accident. For example, if one of your employees is out doing deliveries and they rear end a car in front of them, commercial auto insurance can help cover the damages.

You can also include other types of coverage in a commercial auto policy. This can give you peace of mind while out on the road for business. For example, if you or one of your employees are driving your company van to a client’s home and get into an accident with another driver who doesn’t have car insurance, uninsured/underinsured motorist coverage will help pay the costs to fix your company vehicle and your medical expenses. Or if your company’s vehicle is damaged by theft, vandalism, fire or natural disaster, comprehensive coverage will help pay the cost for repairs or replacement.

These are just a few types of coverage available with commercial auto insurance, but you can speak to an agent or specialist to learn more.

Do I Need Commercial Auto Insurance?

In most states, you will need to have commercial auto insurance coverage if your business owns, leases or rents any vehicles, such as trucks or cars. Commercial auto insurance can also cover vehicles that your employees own if they’re using it for business reasons. If there’s physical damage to property or medical expenses related to an auto accident that happens while on the job, commercial car insurance gives you the liability coverage you need to pay for it.

Although coverage availability and requirements will vary by state, there’s many different types of businesses that can benefit from having commercial auto insurance, including:

Six Things You Need to Know About Commercial Vehicle Insurance

how does commercial auto insurance work

1. Who Is Insured Under a Commercial Auto Insurance Policy?

Your commercial auto insurance policy can help cover you and your employees while driving company-owned vehicles for business. Your family members are typically not covered under your commercial auto insurance policy if they are not employees at your business, unless they have your permission as the insured to use the vehicle.

2. Which Types of Vehicles Are Covered by Commercial Auto Insurance?

Company-owned and operated vehicles are typically covered by commercial auto insurance, such as:

  • Pick Up Trucks
  • Box trucks
  • Work vans
  • Sedan’s and SUV’s

3. Are Trailers Covered Under Commercial Auto Insurance?

Yes, there is commercial insurance coverage available for trailers, dump trucks, semi-trucks and utility trucks.

4. Does Commercial Auto Insurance Cover Personal Use?

Commercial auto insurance is designed to cover vehicles used for operating a business and its unique needs. However, commercial insurance may not provide all the protections needed for personal automobile use.

5. Does a Sole Proprietor Need Commercial Auto Insurance?

If you’re a sole proprietor who uses a truck you own for business reasons, it’s a good idea to have commercial auto insurance. Commercial auto policies can provide larger liability limits than what you’d receive with just your personal auto insurance policy.

6. What Is the Difference Between Commercial and Personal Auto Insurance?

Personal auto insurance offers coverage for you and your family operating your personally owned vehicles. Commercial auto insurance covers your business owned vehicles operated by you or your employees used for business reasons. The commercial auto policy offers coverages unique to needs of a business that you won’t see with a personal auto policy.

How Do I Purchase Commercial Auto Insurance?

We make it easy for you to find the right types of coverage for your business. Our specialists can help you customize your commercial auto insurance to fit your needs perfectly.

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