Commercial Auto Insurance | Business Coverage

Commercial auto insurance companies offer commercial auto insurance coverage that has higher liability limits than personal auto insurance policies. Commercial auto insurance quotes will reveal that commercial auto insurance costs vary dramatically by vehicle types like limousines and 18-wheelers. Shuttle services, fleet services, and delivery services must have a commercial auto insurance policy.

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

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Written by Eric Stauffer
Founder & Former Insurance Agent Eric Stauffer

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jun 1, 2022

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Commercial Truck

On the surface, commercial auto insurance can seem very similar to personal auto coverage. After all, both policies provide protection for a motor vehicle against a variety of perils, and both offer liability protection for car accidents.

However, commercial auto insurance differs from its personal counterpart in a few important ways, including the scope of the policy.

If your business requires the use of one or more vehicles, you probably need to carry a commercial auto policy.

How Commercial Auto Insurance Differs from Private Coverage

In terms of coverage, commercial and private auto policies are usually pretty similar; each can have collision, comprehensive, bodily injury and liability coverage.

However, the liability limits of a commercial policy will tend to be higher than those for personal insurance as commercial drivers are open to more risks and litigation.

Additionally, commercial policies will have a greater scope.; They are designed to pay for large fleets of vehicles or very expensive custom vehicles that would not usually be owned by private individuals.

Different types of commercial policies apply in these situations. For example, some policies are made for fleet companies while others are designed for taxi services.

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Who Needs Commercial Car Insurance?

Any company that uses vehicles as part of its business should consider purchasing commercial auto coverage.  A few businesses have a particularly high need of this type of insurance:

  • Taxi, shuttle and limo services
  • Fleet services
  • Delivery services
  • Any business that requires driving clients from one location to another

These types of businesses carry high liability risks, and the price of a claim can be extensive if an accident were to occur. Carrying the appropriate amount of auto insurance can protect the company from devastating lawsuits in the wake of a car accident.

It’s also worth noting that commercial insurance premiums for business vehicles can often be lowered by ensuring that sufficient security is installed to protect them.

Protecting your commercial vehicles by keeping them behind security gates and steel barriers in areas monitored by security cameras demonstrates to potential insurers that the risk of theft is significantly lower.

Many people mistakenly complete business-related activities in their privately insured vehicles, not realizing that this could result in a denied claim if the insurer found out.

It’s always better to be safe than sorry when purchasing insurance coverage, and check with your insurance company before using your personal car for business tasks. Don’t take a risk with your personal auto insurance policy. Commercial coverage for business purposes is designed to meet your business insurance needs, whether through a basic commercial car insurance policy or more comprehensive coverages.

How Much Does Commercial Auto Coverage Cost?

The cost of a commercial auto policy will depend on your company’s risk level and the type of protection you require. The expense of insuring a fleet of 18-wheel tractor trailers will be different from that of a limousine service.

It is important to have your business analyzed by multiple insurance companies in order to get personalized quotes. This will give you sense of how much it will cost to insure your vehicles, depending on policy limits and coverage limits.

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