Running a business typically requires using vehicles for daily operations. That’s why insuring your vehicle—whether it’s a single car for client meetings or an entire fleet for deliveries—is essential for protecting your business. Commercial auto insurance, or business car insurance, is designed to prevent financial losses related to commercial vehicle use. Learn the ins and outs of this type of insurance and whether a policy is right for you.
Key Takeaways
- Commercial auto insurance protects vehicles used for business purposes, offering higher liability limits and coverage for work-related risks.
- Businesses of all sizes—from freelancers to large companies—can benefit from commercial coverage, especially if they use vehicles for deliveries, transporting goods, or client services.
- When selecting a policy, consider factors such as your business type, the number of vehicles, and whether employees drive company-owned cars.
How Does Commercial Auto Insurance Work?
Commercial car insurance, or business car insurance, provides coverage for vehicles used in work-related activities. Unlike personal auto insurance, these policies include higher liability limits and cover the unique risks associated with business operations.
A commercial car insurance policy typically includes:
- Liability coverage: Pays for property damage and injuries to others in an accident.
- Collision coverage: Pays for damage to the insured vehicle after a collision.
- Comprehensive coverage: Covers non-collision damage like theft, vandalism, and weather-related incidents.
- Medical payments (MedPay) or personal injury protection (PIP): Pays for medical expenses for you and your passengers.
- Uninsured/underinsured motorist coverage: Protects against drivers who don’t have adequate insurance.
Additional coverage options may be available depending on the insurer and your business needs.
Who Needs Business Car Insurance?
Any business that uses vehicles for work purposes should consider car insurance for commercial vehicles. This includes:
- Freelancers and independent contractors who use personal vehicles for business-related tasks.
- Small business owners and companies with one or more vehicles for daily operations.
- Companies with delivery or transport services.
- Construction and trade professionals, including contractors, electricians, and plumbers, who use their vehicles to transport tools and equipment.
What Is the Difference Between Personal and Commercial Car Insurance?
While both policies offer protection, there are differences between personal and commercial insurance, including:
- Coverage limits: Business policies typically have higher liability limits.
- Business-specific coverage: Protects company-owned vehicles, employees driving for work, and business-related equipment.
- Vehicle use: Business policies cover vehicles used for transporting goods, passengers, or business-related activities.
If you use your vehicle for work, you may need a commercial insurance policy instead of a personal one. Even if your business vehicle doubles as your personal car, your general car insurance policy may not cover accidents that happen during commercial use.
Do Rideshare Drivers Need Commercial Auto Insurance?
While rideshare drivers for companies like Uber or Lyft need a specific type of coverage, their insurance, called rideshare insurance, differs from commercial auto insurance. Although both provide coverage for work-related driving, they serve different purposes:
- Rideshare insurance: Covers personal vehicles used for ridesharing services. It typically fills gaps between a personal insurance policy and the rideshare company’s coverage.
- Commercial auto insurance: Covers vehicles used for a broader range of business activities, including transporting goods, making deliveries, or carrying passengers for a fee outside of a rideshare platform.
How to Choose the Right Commercial Auto Policy
Consider the following factors when choosing an insurance policy for your business:
- Type of business: Industries with higher risks, like trucking or delivery services, may need specialized coverage.
- Number of vehicles: A single vehicle may need a standard policy, while fleets might require customized coverage.
- Employees driving company vehicles: Policies can include coverage for employees operating business-owned vehicles.
Get a Quote for Commercial Car Insurance
Having the right coverage can protect your business from unexpected costs. If you’re looking for car insurance for a commercial vehicle, get a quote from The General’s trusted partners and find a policy that works for you.
