Commercial auto insurance covers the cost of bills and expenses if a business-owned vehicle is involved in an accident. It's required for any vehicles used solely for work purposes in California.
Your personal auto insurance policy covers you while driving to and from work, but not while making deliveries, picking up supplies, and other work-specific uses. A business auto policy would cover you and your personal vehicle in case you’re at fault for an accident during a work-related errand.
Any vehicles you own solely for work purposes must be covered by a commercial auto policy, whether you own a single pickup truck, a food truck, or a fleet of semi-trucks and tractor trailers.
Your business could be in legal and financial jeopardy without commercial auto insurance coverage. In California, any business that has its own vehicles must at least carry auto liability insurance.
If one of your business vehicles is at fault in an accident, you could face an expensive lawsuit or settlement. You’d likely have to pay for damage to the other vehicle or property, medical bills, lost wages, pain and suffering, plus other related costs.
Additionally, you could face severe penalties for not owning commercial auto insurance. If you are cited for not having insurance, you may receive a fine of over $350, have your vehicle impounded, and see an increase in your auto insurance rates. For a repeat offense, the fine can increase to $1,800, and the state may suspend your license for up to four years.
All vehicles in California are required to have a minimum amount of auto liability insurance coverage, whether they’re for personal or business use. These liability limits are:
Your insurance agency might recommend higher liability coverage limits based on the types of vehicles you own and how they’re used.
Semi-trucks and other vehicles with a U.S. Department of Transportation of California serial number will have additional liability coverage requirements, depending on the type of vehicle and how it’s used.
You can see if your business needs these additional requirements by checking your USDOT number or docket number with the Federal Motor Carrier Safety Administration.
If you’re using your own vehicle for work-specific activities, your personal auto policy wouldn’t cover you in the case of an accident. That’s why many small business owners purchase hired and non-owned auto insurance (HNOA). This liability policy covers accidents in personal, leased, and rented vehicles used for work purposes.
If you or an employee gets into an accident while driving a personal car for a work errand, your HNOA coverage would help pay for any claims or lawsuits against your business. It’s worth noting that this would not cover damage to the vehicle used by your business.
While every California business owner must meet the minimum requirements for business auto insurance, this mandate only applies to liability coverage. This can protect you if one of your vehicles causes an accident, but it does not insure you against a mishap caused by someone else.
It’s worth considering these other commercial auto coverage options to make sure you’re fully protected:
Insureon makes it easy for business owners to compare commercial auto insurance quotes online. Complete one easy application to review quotes specific to your business and industry from leading U.S. insurers. Start an application for a commercial auto insurance quote today.