Commercial Auto Insurance
Commercial auto insurance protects your business vehicles, like vans, trucks, and service vehicles, against accidents, liability, and physical damage.
What is commercial auto insurance?
A commercial auto insurance policy covers business-use vehicles against costs associated with bodily injuries, property damage and legal fees related to accidents. Commercial auto insurance is specifically designed for vehicles titled to a business or otherwise used for business purposes. If you are a small business owner, it's important to know that your BOP (business owners policy) does not cover cars.
Your personal insurance policy won’t cover your vehicle if it’s being used for business purposes. As such, you’ll need a separate commercial policy. The coverage you choose depends on your business needs. Delivery drivers, for instance, will require different coverage than a tow truck.
What does it include?
Most states require businesses to carry liability insurance to cover injuries or property damage caused in an accident while you or your employees are driving for work. Many also mandate uninsured/underinsured motorist coverage and medical payments coverage (sometimes called Personal Injury Protection, or PIP). You can also choose to add physical damage coverage for vehicles your business owns, leases, or rents.[1]
Business Owners Policy Coverage Guide
A business owners policy (BOP) can provide general liability and property coverage in one convenient package. Find out if it's enough coverage for your small business with our handy guide.
Do you need a commercial auto policy?
If you use a vehicle for business purposes, you need a commercial policy. Many drivers may be surprised to discover that their personal policy doesn't apply to even simple business-related activity. As such, it's crucial to both you and your business that you have the correct policy type in place.
Some common business activities that require a commercial auto insurance policy include vehicles that:
- Are used to run business errands
- Carry tools
- Transport equipment or people
- Are driven to worksites
- Deliver goods or food
- Are titled to a business
Delivery drivers in particular are often surprised that they need a separate policy. Those who deliver food using their personal vehicles can put themselves at risk without a commercial auto policy. It's rare that this type of insurance is covered by the employer and is therefore left to you to purchase.
How does commercial auto insurance work?
Similar to a personal auto insurance policy, your coverage is there to protect both you and your vehicle. There are a number of coverage options available, many of which are similar to a standard car insurance policy. We'll go over these, as well as some of those more specific to commercial needs, below.
Standard coverage options
Liability insurance goes toward paying for damages or injuries that are caused by you. This coverage is further split into the categories of property damage and bodily injury.
Collision insurance is a physical damage coverage that protects your vehicle if it is damaged in an accident. If you elect collision coverage, it’s likely that you will face a deductible. The deductible is the portion of the damages that you are responsible for paying before your insurance company kicks in. Collision coverage will pay up to the limits that you set.
Comprehensive insurance is physical damage coverage that kicks in to cover non-collision damage to your business vehicle. This can cover things like vandalism, theft or animal damage.
Personal injury protection (PIP) pays for injuries sustained by you or your passengers in an accident regardless of fault. This coverage is more likely to be required in “no-fault” states, and may not even be available in some states.
Med pay covers the medical expenses of you or your passengers in the event of an auto-related injury.
Uninsured motorist coverage provides protection in the event of a collision with a driver who doesn’t have insurance.
- Pet injury coverage: Covers medical expenses if your pet is injured while using your business vehicle.
- Non-owned: Covers your liability if an employee uses their personal vehicle on occasion.
- Any auto: Extends liability coverage to any non-owned or hired cars as well as new vehicles purchased.
- Hired auto: Covers liability for any vehicle you lease, rent or borrow in connection with your business.
Larger trucks utilize many of the same types of coverages as standard vehicles, but also have coverage options specific to them. Some of these options include motor truck cargo, motor truck general liability and rental reimbursement with downtime. These coverages work to protect you in the event of accidents that result in losing cargo, causing injury or property damage and losing income due to a damaged truck.
What types of vehicles are covered by commercial car insurance?
Basically, any road-traveling vehicle used for business purposes can be covered by a commercial auto policy. Commercial vehicle types insurers will cover include:
- Passenger vehicles
- Cargo vans, pickups and utility trucks
- Food trucks
- Large trucks
- Trailers
- Tractor-trailers
Small Business Insurance
Make sure that your business assets are protected by reading our guide to finding the right small business coverage for your needs.
How much does commercial auto insurance cost?
Costs for a commercial auto policy can vary widely from one insurance company to another. Progressive Commercial insurance costs range from $272 per month for contractor autos to $954 (for-hire transport trucks).[2] This average is for a motorist with a clean driving record who has both liability and physical damage coverage.
Other factors that can contribute to insurance cost include:
- Claims history
- Number of vehicles covered
- Coverage limits
- Deductible limit
- Type of vehicle covered
How to find commercial auto insurance
Commercial auto insurance coverage is crucial to avoid losses and protect your business. Policyholders should ensure that any business-use vehicles are properly covered, even if they are used only occasionally for business. Not carrying auto insurance for your business-use vehicles leaves you exposed to risk. This can result in serious financial losses and be a threat to the business itself.
Business owners and commercial drivers looking for coverage should compare commercial auto insurance quotes to find the best rates.
Reach out to Progressive today.
Commercial auto insurance FAQs:
Business Vehicle Insurance. III
How much is commercial auto insurance? Progressive
About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.