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Who Needs Commercial Auto Insurance?

A middle-age Cucasian businessman giving a lift to a young, Caucasian businesswoman and illustrating who needs commercial vehicle insurance

You’re used to carrying insurance on your vehicle, but if you’re a business owner, your personal insurance might not be enough. Commercial auto insurance could be required, depending on your business and how your vehicles are used. So who needs commercial auto insurance?

What is Commercial Auto Insurance?

In order to determine if it’s needed, it’s helpful to understand what it is as well as what it’s not. Like a personal auto policy, commercial vehicle insurance is intended to cover damage and injuries involving the covered vehicle. The main difference is that the amount of coverage, and the situations and usages that are covered, is more appropriate for vehicles used for business.

Commercial Auto Insurance vs. Personal Auto Insurance

Personal auto insurance is the type of insurance that is familiar to anyone who drives. At minimum, it covers liability in the event of an accident, and can also cover damage to your own vehicle as well as your personal medical expenses in an accident. However, if you are in an accident while using your vehicle for business, you will more-than-likely not be covered.
Liability limits are a common difference between the two types of policies. Businesses will very often need higher limits, and commercial insurance makes this available.

Do I Need Commercial Auto Insurance?

You are probably aware if your business has a commercial truck, insurance for it will need to cover commercial use. What about other vehicles?
If your vehicle’s business use is limited to commuting to and from your business, personal auto insurance is probably adequate. If it is used for more than that, you just might need a commercial policy. Here are some questions to ask to decide if you will need business vehicle insurance:
• Do employees use the vehicle?
• Is it used to get to job sites or clients?
• Is it used to carry equipment or tools used in your business?
• Is it used to deliver goods?
• Is it used to carry passengers or other items for pay?
• Does it have equipment installed that is used for your business (e.g. winches, hydraulic lifts, etc.)?
• Is the vehicle owned by a business entity rather than a person?
• Is the vehicle significantly heavier than a typical passenger vehicle?
If the answer is “Yes” to one or more of those questions, you’ll probably need commercial car insurance.

What Does Commercial Auto Insurance Cover?

A commercial auto policy will offer similar coverage to the personal policies that you’re used to, but tailored to the needs of a business vehicle. The common coverage that you’ll see includes:
• Liability – Coverage for damage to others’ property and for injury to others.
• Collision – Coverage for damage to the business vehicle from an accident.
• Comprehensive – Coverage for damage to the business vehicle, other than from a collision.
• Personal injury – Coverage for your own or your employees’ injuries resulting from an accident.
• Uninsured/underinsured motorist – Covers accidents involving a driver who isn’t adequately insured.
• Non-owned auto – This covers you or your employees when driving a vehicle that’s rented or borrowed.
While there are additional coverages available, these are the types that are most common.

What About Ridesharing?

If you drive for a ridesharing service like Uber or Lyft, you might need ridesharing insurance. The ridesharing companies do cover you while you are driving for them, but this coverage is only in effect from the time you accept a ride through the time you drop your passenger off. You won’t be covered while you are waiting for a ride request. Rideshare insurance is intended to cover you during this period; additionally, it can help with the deductibles during the times you are covered by Uber or Lyft.

The needs of a business differ in a lot of ways from those of the rest of us, and their auto insurance needs are no exception. If you own a business, not having the right insurance coverage could devastate your business in the event of an accident. This article should give you a better idea of whether you need it or not, but if you’re still unsure, contact an insurance agent who can answer any questions you might have.

If you need commercial auto insurance, Freeway can help you find a policy that fits your needs and budget. Request a free commercial auto insurance quote online or over the phone at 800-777-5620.

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