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Commercial auto insurance
Commercial auto insurance
Commercial auto insurance covers legal bills, medical expenses, and property damage if a business vehicle is involved in an accident.
Why is commercial auto insurance important for small businesses?
If your company owns a car or any other type of road vehicle, you will very likely need commercial auto insurance. Almost every state requires commercial auto insurance coverage for business-owned vehicles, with mandatory liability limits for damage coverage.
You can rely on commercial auto insurance for financial protection if you or an employee needs medical care or faces legal expenses due to an automobile accident. If you don’t carry commercial vehicle insurance, your business will be responsible for any medical bills and legal fees, which can get expensive.
Businesses that purchase commercial auto insurance often:
- Have a vehicle titled to their business
- Drive to and from worksites
- Carry tools, equipment, or products used for work
- Transport clients or employees
- Rely on delivery drivers or couriers
Is commercial vehicle insurance required?
Almost every state mandates commercial auto insurance coverage for business-owned vehicles, with New Hampshire being the only state where commercial car insurance isn’t required.
However, all states do require the ability to compensate someone if you or an employee is at fault in an accident.
Even when business auto insurance coverage isn’t required, it’s still a smart choice. Without it, you could end up paying thousands of dollars in medical bills and other costs. This is because your private insurance won't cover you in the event of a work-related accident.
Commercial auto insurance requirements in your state
Select your state to learn about auto insurance requirements for your small business.
What does commercial auto insurance cover?
Commercial auto insurance helps cover medical payments and property damage related to an accident. This coverage includes legal expenses if you’re sued. A policy may also cover vehicle theft, vandalism, and other losses and damages.
Specifically, commercial auto insurance coverage includes:
Auto accident liability
Commercial auto insurance includes property damage liability coverage that helps pay for damages in an accident you caused. That could include:
- Repair costs for the other person's damaged vehicle or property
- Legal expenses if you're sued over the other driver's injuries
Medical payments
Commercial auto insurance policies that include medical payments, or bodily injury liability, coverage can pay for:
- Your medical expenses for bodily injuries from a car accident
- Medical expenses for passengers in your vehicle
This coverage is available regardless of who caused the accident.
Physical damage and collision
Commercial automobile insurance protects against vehicle theft and physical damage, as well as provides comprehensive coverage for non-collision damages, such as:
- Vandalism
- Fire and certain weather events
- Impact with another object
Accidents involving uninsured motorists
About one in eight drivers in the United States are uninsured, according to the Insurance Information Institute (III). When they cause accidents, the uninsured or underinsured might not be able to pay for damages.
Your policy's uninsured motorist coverage makes sure your business doesn’t have to pay for the resulting medical expenses or vehicle repairs.
How much does commercial auto insurance cost?
Commercial auto insurance costs an average of $147 per month. 37% of Insureon small business customers pay less than $100 per month for their premiums.
Your cost is calculated based on a number of factors, including:
- Number of vehicles
- Type of vehicle and value
- Level of risk involved
- Claims history
- Employee driving records
- Policy deductible, limits, and exclusions
- Endorsements, like bobtail coverage
Verified business insurance reviews
Hear from customers like you who purchased small business insurance.
Who needs commercial auto insurance?
Commercial auto insurance benefits a variety of industries that utilize business vehicles, including cars, trucks, SUVs, and more. It is designed for both businesses and independent contractors who need a company vehicle in order to operate their business.
However, there are a few specific professions that need commercial auto coverage options more often than others. Consider the following industries and examples:
Construction and installation
An HVAC installation employee rear-ends a sports car while driving your construction or installation business’s truck. The accident is the employee’s fault.
Your business’s commercial auto insurance policy can cover the cost of repairing the sports car. It can also cover the other driver’s medical expenses for injuries sustained in the crash.
Consulting
A consultant at your IT consulting company is driving to a client’s home when another driver runs a stop sign and hits your company car. The other driver accidentally let his insurance policy lapse and is not insured.
Your company car policy can pay for the damage to your car caused by the uninsured driver.
Cleaning
A janitor gets into an accident while driving a cleaning company's van to a client's office. No one is seriously injured, but the janitor is brought by ambulance to a local hospital and given X-rays.
The cleaning company's commercial auto insurance policy pays for the ambulance ride and medical treatment.
Landscaping
A tree uprooted by a windstorm falls on a lawn care company’s truck and breaks the windshield. The lawn care business’s commercial auto insurance policy pays for a replacement windshield.
Top professions that need commercial auto insurance
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How to get commercial auto insurance
View video transcript.
Are we a drama free bakery? Umm...What? What drama?
Direct hit!
You never really know what will happen. (screaming)
I deliver pastries, and pastry-like items. All these cupcakes aren't going to deliver themselves.
Don't worry, you have commercial auto insurance. You're covered!
Who put that pole there?
Less drama, more treats! Get all the coverage your business needs by clicking this button.
Protection is peace of mind...and a piece of cake.
Complete our easy online insurance application to get free quotes. Insureon's expert insurance agents can help you choose the best commercial auto coverage that meets the needs and budget of your small business.
Your business can acquire business vehicle insurance through a standalone policy, or have it added as an endorsement to a commercial package policy.
From California to New York and everywhere in between, learn more about how to get commercial auto coverage for your business.
What does commercial auto insurance not cover?
Personal or leased vehicles
Commercial auto insurance does not cover leased or personal vehicles used for business purposes. However, your business can still be held accountable if an employee gets into an accident in a personal or leased vehicle.
Hired and non-owned auto (HNOA) insurance is the appropriate policy for vehicles that your business uses but does not own. This policy will provide protection for employees who drive their own or leased cars for work purposes, such as traveling to and from job sites.
In addition, lease gap insurance is an endorsement you can add to your commercial auto policy that covers the total loss of a leased or financed vehicle.
Another endorsement to consider is drive other car insurance, which covers non-owned vehicles that employees or executives may rent or borrow.
Recently purchased vehicles
If you purchase a business vehicle and it's not yet covered by your commercial auto insurance policy, you would be responsible for any liabilities that may occur to the vehicle.
In order to protect any recently purchased business vehicles, you should get any auto liability insurance, which offers a temporary extension of your commercial auto coverage. It can also cover any hired and non-owned vehicles that you use for your business.
Customers' vehicles
If your business is storing or performing service on a customer's vehicle, it is not covered under your commercial auto insurance. If something were to happen to your customer's vehicle, such as damage from a break-in, you would be responsible for repair and other related expenses.
Garage keepers liability coverage would insure your customer's automobiles while it is in your care, custody and control.
Garage business risks
If you have a garage-based or auto service business, your commercial auto insurance policy does not protect against common garage operation risks, such as a customer slipping and falling on leaked motor oil.
Garage liability insurance is a type of general liability insurance that covers the many risks associated with automotive business operations. This includes customer injuries and legal costs from lawsuits.
General liability insurance
General liability insurance covers common business risks like customer injury, customer property damage, and advertising injury. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.
Business owner’s policy
A business owner’s policy (BOP) bundles general liability insurance with commercial property insurance. It typically costs less than if the policies were bought separately.
Workers’ compensation insurance
Workers’ compensation insurance covers medical costs and lost wages for work-related injuries and illnesses. This policy is required in almost every state for businesses that have employees.
Professional liability insurance
Professional liability insurance, also called errors and omissions insurance, protects small businesses against the costs of client lawsuits over unsatisfactory work.
Cyber insurance
Cyber liability insurance, also called cybersecurity insurance, protects small businesses from the high costs of a data breach or malicious software attack. It covers expenses such as customer notification, credit monitoring, legal fees, and fines.
Get commercial auto insurance quotes
FAQs about commercial auto insurance
Review answers for frequently asked questions about commercial auto insurance
What is the difference between commercial car insurance and regular personal auto insurance?
While both policies offer personal injury protection, commercial auto insurance policies are designed for company cars that cover a lot of ground. Policies typically have higher coverage limits to account for the increased risk.
Personal auto insurance policies only cover claims related to personal use, including your commute and travel unrelated to work. They have lower limits and usually cost less.
If you’re involved in an accident while driving your personal car for work, your insurance company might refuse your claim. That’s why independent contractors or sole proprietors who own a car used for work should consider commercial auto insurance or HNOA.
If you’re uncertain which policy you need, check with an insurance agent.
Read more about the difference between personal and commercial auto insurance.
What’s the difference between collision coverage and comprehensive coverage?
Collision coverage pays for damage to your vehicles from accidents involving objects, such as a telephone pole. Comprehensive coverage is for damage caused by something other than a collision, such as fire, natural disasters, falling tree limbs, or hitting an animal.
Your policy may have different coverage amounts for collision and comprehensive.
Who is insured under a commercial auto policy?
Commercial auto coverage protects your business, you, and your employees if they own, lease, or rent vehicles for business purposes.
This coverage also generally extends to:
- Named drivers / additional insureds: Anyone who is named on the policy and is behind the wheel of a covered vehicle.
- Business owners: Owners of the company who drive the insured vehicle for business uses.
- Employees: Those on your staff who drive the insured vehicle for work purposes.
- Volunteers: Covers volunteers who have been given permission to drive the insured vehicle for the business.
- Family members: Usually not covered unless given explicit permission from the policyholder to use the vehicle.
Where can I learn more about commercial auto insurance?
If you want to learn more about this type of business policy, you can find additional answers in our frequently asked questions about commercial auto insurance.
If you have any additional questions about auto coverage or other small business insurance options, you can also contact an Insureon agent and get a free commercial auto insurance quote.
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Best commercial auto insurance for small businesses
Not every provider offers the same coverage and support when it comes to commercial auto insurance. You'll want to look for a highly rated auto insurance company that's prepared to meet the unique risks of your business.
Updated: October 21, 2024