What is Commercial Auto Insurance?

Commercial auto insurance, also called business auto insurance, helps cover the costs of an auto accident when you or an employee is at fault while driving a business-owned vehicle. If you drive a vehicle for business reasons, having the right commercial auto insurance policy is essential and protects you and your employees, as well as the vehicles you own, lease, rent or borrow. If you or an employee gets into an accident while driving for work-related purposes and you don’t have the right commercial auto insurance coverage, you’d have to pay damages out of pocket while putting your business and livelihood at risk.

Policies typically help pay for vehicle and property damage, medical expenses for you, your employees and any other passengers, as well as legal fees. They may also cover underinsured motorists, rental reimbursement, and towing and labor reimbursement, as well as business owners who use a personal vehicle for work-related purposes. 
Most states require every vehicle on the road – whether they are used for personal or business reasons – to be insured. Minimum coverage for third-party injuries and property damage is often mandated. 

Why do I need it?

Business owners who use vehicles in their business operations need commercial auto insurance. This includes businesses that own, lease or rent vehicles – such as cars and trucks – and employees who drive their own vehicles for business activities – such as making deliveries, traveling to clients or job sites, and transporting products or equipment. Simply commuting to and from work doesn’t constitute a need for commercial auto insurance. 

Keep in mind that your personal auto insurance policy probably excludes business activities. Commercial auto policies typically have higher limits than personal auto policies because driving a vehicle for business purposes exposes different risks with potentially much higher claims. So when it comes to vehicles used in your business’ operations, you may need the more comprehensive coverage a commercial auto policy provides. 

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