Whose Commercial Auto Insurance Covers Me?

Commercial auto insurance is a policy that covers vehicles used for business purposes. This includes vehicles owned by the business, as well as those rented, leased, or borrowed. It also covers employees who use their personal vehicles for work. Commercial auto insurance is typically required for vehicles heavier than a standard pickup or SUV, such as semi trucks and dump trucks. It also offers higher liability limits than personal auto insurance policies.

Personal auto insurance, on the other hand, covers vehicles used for personal use, such as running errands or commuting to work. It does not cover incidents that occur while the vehicle is being used for business purposes.

Therefore, if you are using a vehicle for business, you will likely need to be added to a commercial auto insurance policy.

Who needs commercial auto insurance?

Commercial auto insurance is designed for businesses that use vehicles for work purposes. This includes businesses that own or lease cars, trucks, vans, or other vehicles to transport goods, equipment, or people.

• Vehicle ownership: If a business owns your vehicle, you will likely need a commercial auto insurance policy. If you are a sole proprietor, you may only need a personal auto insurance policy.
• Vehicle usage: If you use your vehicle for business purposes, you will probably need a commercial auto insurance policy. This includes using your vehicle to transport goods or people for a fee, conducting a service, or travelling to multiple job sites per day.
• Vehicle type and weight: If your vehicle is larger or heavier than a typical pickup truck or SUV, such as a dump truck, cargo van, tow truck, semi-truck, or commercial trailer, you will likely need a commercial auto insurance policy. These vehicles can cause more damage in an accident and may require special insurance coverage.
• Liability limits: If your business vehicle requires higher liability limits, you will probably need a commercial auto insurance policy. Commercial policies typically offer higher liability limits than personal policies.
• Required coverages: If you require specific commercial auto insurance coverages, such as coverage for high-value or specialised equipment, you will need a commercial auto insurance policy.

Some common professions that typically require commercial auto insurance include:

• Contractors: Businesses that use trucks or vans to transport tools and equipment to job sites, such as contractors, landscapers, and construction companies.
• Delivery companies: Businesses that use cars or trucks to deliver goods to customers.
• Transportation services: Companies that use cars or vans to transport passengers, such as taxis, limousines, and livery services.
• Food services: Businesses that use vehicles for delivering food or operating mobile kitchens, such as restaurants, food trucks, and caterers.
• Non-profit organisations: Organisations that use buses or vans to transport volunteers or clients.

What does commercial auto insurance cover?

Commercial auto insurance is a type of car insurance specifically designed for vehicles used for business purposes. It covers a range of vehicles, from cars to large trucks, and offers protection in the event of accidents or other problems covered by the policy.

Commercial auto insurance policies typically have three basic parts: physical damage insurance, liability insurance, and other coverage types.

Physical Damage Insurance

Physical damage insurance covers the costs of repairing or replacing your vehicle if it is damaged or destroyed. This includes:

• Collision coverage: Pays for repairs or replacement if your vehicle collides with another object, overturns, or rolls, regardless of who is at fault.
• Comprehensive insurance: Covers damage to your vehicle from causes other than an accident, such as theft, flood, vandalism, earthquakes, fire, or collisions with animals.

Liability Insurance

Liability insurance covers your legal responsibilities to others in the event of an accident. This includes:

• Bodily injury liability insurance: Pays for others' injuries that you or your employee accidentally cause, as well as your legal costs if you are sued over the incident.
• Property damage liability insurance: Pays for damage to another person's property if you or your employee cause an accident, and also covers your legal costs.
• Uninsured and underinsured motorist coverage: Pays for your injuries and property damage if you are hit by a driver without insurance or with insufficient insurance.

Other Coverage Types

Commercial auto insurance policies can also include a range of other coverage types, such as:

• Medical payments or personal injury protection: Pays for medical expenses and other costs (e.g. lost wages) for you and your passengers, regardless of who caused the accident.
• Rental reimbursement: Covers the cost of a rental car while your insured vehicle is being repaired.
• Roadside assistance: Covers towing, jump-starts, and minor roadside repairs.
• New vehicle replacement: Helps pay for a new comparable vehicle if your work vehicle is totaled.

Personal auto insurance vs commercial auto insurance

Personal auto insurance and commercial auto insurance are two distinct types of vehicle insurance, each catering to different needs and usage patterns. While personal auto insurance is designed for personal vehicle use, commercial auto insurance is tailored for vehicles used for business or commercial purposes. Here's a detailed comparison of the two:

Ownership and Usage:

The primary distinction between personal and commercial auto insurance lies in the ownership and usage of the vehicle. Personal auto insurance is intended for privately owned vehicles used for personal activities, such as commuting to work or travelling for leisure. On the other hand, commercial auto insurance is necessary when a business owns the vehicle or if it is used predominantly for business purposes. This includes transporting goods, equipment, or people as part of work duties.

Coverage:

Personal auto insurance policies typically cover the owner of the vehicle and their immediate family members. They provide protection for medical expenses, vehicle repairs, and liability coverage in the event of an accident. However, they usually exclude business use, meaning accidents that occur while driving for work may not be covered.

Commercial auto insurance, on the other hand, covers the business, its employees, and can include protection from auto-related lawsuits and settlements. It often has higher liability limits than personal auto insurance, as commercial vehicles may require more protection. Commercial policies can also cover vehicles not owned by the company, such as when an employee uses their car for work.

Cost:

The cost of insurance depends on various factors, including the type of vehicle, its usage, ownership, and liability limits. Commercial auto insurance generally costs more than personal auto insurance due to its higher coverage limits and the fact that it insures an entire business, including multiple drivers and vehicles. However, the cost of commercial insurance can vary depending on the size of the business, with smaller businesses paying lower premiums than larger ones with more drivers and vehicles.

Vehicle Type:

The type and weight of the vehicle also play a role in determining the type of insurance needed. Personal auto insurance is typically sufficient for standard cars, SUVs, or pickup trucks. In contrast, commercial auto insurance may be necessary for heavier or specialised vehicles, such as dump trucks, semi trucks, or commercial trailers, as they can cause more damage in accidents and may require special insurance coverages.

In conclusion, the choice between personal and commercial auto insurance depends on the nature of vehicle usage, ownership, and the level of coverage required. Commercial auto insurance is designed to protect businesses and their vehicles, while personal auto insurance focuses on private vehicle owners and their families.

Who owns the vehicle?

Commercial auto insurance is designed for vehicles that are owned and used by a business. This includes vehicles that are leased or rented for business purposes.

If a business owns your vehicle, you will most likely need a commercial auto insurance policy. If you are a sole proprietor, you may only need a personal auto insurance policy, depending on how often and for what purpose the vehicle is used.

Commercial auto insurance covers vehicles such as cars, trucks, vans, and SUVs. It also covers heavier vehicles like semi-trucks, dump trucks, and commercial trailers. If your business owns or uses these types of vehicles for work purposes, you will need commercial auto insurance.

Some common professions that typically require commercial auto insurance include:

• Contractors
• Landscapers
• Construction companies
• Delivery companies
• Transportation services (e.g. taxis, limousines)
• Food services (e.g. restaurants, food trucks, caterers)
• Non-profit organizations

It's important to note that personal auto insurance policies typically do not cover vehicles used for business purposes. Therefore, if your vehicle is necessary for your work, it's recommended to get commercial auto insurance to protect yourself and your business.

Who drives the vehicle?

Commercial auto insurance is a type of car insurance specifically designed for vehicles used for business purposes. It covers vehicles owned by and used in a business, such as cars, trucks, and vans. It also covers vehicles that are rented, leased, or borrowed.

If a business owns your vehicle, you will most likely need a commercial auto insurance policy. If you are a sole proprietor, you may only need a personal auto insurance policy. The type of policy you need depends on how often the vehicle is used and what it is used for. If you use your vehicle for business purposes, you will probably need a commercial auto insurance policy.

Commercial auto insurance covers you and your licensed employees who are permitted to drive your company's vehicles and are listed on the policy. It is important to add any employee who regularly drives commercial vehicles to a commercial vehicle insurance policy.

Additionally, commercial auto insurance can cover executive officers and their spouses if they drive vehicles that are not on the commercial auto insurance policy. This is known as "Drive Other Car Coverage".

In summary, commercial auto insurance covers licensed employees driving company vehicles, and in some cases, executive officers and their spouses driving non-company vehicles.

Frequently asked questions