If you own a small business or use your vehicle for work purposes, you want to make sure you’re covered in the case of an accident. Personal auto insurance doesn’t always cover certain incidents when you’re “on the clock” for your business. Commercial auto insurance isn’t just for big businesses and trucking companies—it protects sole proprietors and small businesses too.

Commercial automobile insurance provides protection for automobiles used in the course and scope of business. Any business that owns motor vehicles or uses any motor vehicles in the course of its business needs commercial auto insurance. Most business owners need liability and physical damage coverages,  and may need industry-specific coverages.

How can you tell when you need commercial auto insurance instead of your personal auto insurance? We take a look.

Personal Auto vs. Commercial Auto Insurance Considerations

How are you using the vehicle?

You may be thinking you're covered under your personal auto policy, but it's not designed for the type of risks you and your employees can face. In fact, most personal auto policies typically contain an exclusion for business use. Commercial auto insurance can cover business-owned vehicles, like fleets of vehicles or trucks, and even your own car, as well as those you rent, lease, or borrow. It can also help when employees use their personal vehicles for business.

Whether you are delivering goods or meeting with customers, picking up supplies or transporting equipment to a job site, taking your business and your vehicles on the road can be essential to your everyday operations. Commercial auto insurance is designed to cover losses should you or an employee be involved in an accident when driving for work purposes.

Commercial auto insurance generally isn't included in your business owners policy. But you can typically purchase it separately, and most states require businesses to have a minimum amount of commercial auto insurance. So, make sure your business is protected from risks on the road.

Some common uses and instances where you may well need commercial insurance:

  • Driving clients or employees
  • Driving for taxi services (like Uber, Lyft, and other rideshare)
  • Performing delivery services (charging a fee to transport goods in your vehicle)
  • Delivering products (like pizza delivery)
  • Driving to a job site
  • Transporting flammable or hazardous material
  • Using your vehicle to tow others’ (for a fee)
  • Performing a service you’re paid for

Basically, if you’re using the vehicle to do something that makes you money, you’ll likely want it covered under commercial auto insurance. A commercial auto insurance policy helps protect your business and provide coverage for commercially owned vehicles used in business operations. A personal auto policy typically provides coverage for personally owned vehicles that are operated by individuals or family members for personal use.

Who is driving the vehicle?

Personal auto insurance generally provides coverage for personally owned vehicles that are operated by individuals or family members that live with them for personal use. It typically won’t cover employees or clients who use the vehicle. If you lend the car for business purposes, your basic auto insurance will likely not cover those incidents. 

If you have employees that typically use the vehicle for your business, you’ll want to cover them with commercial auto insurance. Then, typically any employee with a valid license can use the vehicle.

How much liability do you need?

Commercial auto insurance typically offers higher liability limits than basic auto policies. It’s usually a good idea to protect your business with higher liability limits.

What kind of vehicle is it?

Heavy-duty vehicles, like semi-trucks or trailers, usually require commercial insurance if they’re used for business purposes. Heavy vehicles can do more damage than a typical car, so they typically require higher limits and liability. This includes if you tow a trailer for business purposes.

Who owns the vehicle?

If the vehicle is owned, leased, rented, or registered by a business, you likely need commercial auto insurance. If you’re the sole proprietor and the owner of the car, it’s wise to discuss how you use your vehicle and whether commercial insurance is a good choice for you with a licensed insurance agent.

What if I use my car for a company?

If you drive your personal car for a business or corporation, the organization you work for may cover you under its commercial auto insurance. Talk to your manager (or another relevant employee) to make sure you are covered when you’re driving your personal car on company time in order to fulfill your job duties.

What if I’m a sole proprietor?

In most cases, if a vehicle is used for business purposes, it should typically be protected with commercial auto insurance, not just personal auto insurance.

You can talk to your InsuraMatch agent about modifying your auto policy to include some business uses.

The Bottom Line

Talk to a trusted InsuraMatch agent to discuss your needs and find the right policy for you and your situation. Don’t take a guess when it comes to your livelihood. Get the right policy after just a quick and easy phone call!

Call our licensed insurance advisors today at (844) 300-3364!

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