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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.
At an average cost of around $188 a month, a commercial auto policy from Progressive typically includes liability and physical damage coverage for business-use vehicles.* These policies are critically important to large and small businesses that utilize vehicles, as you and your business may be at risk without them.
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. Find out more about commercial vehicle policies and what they cover below.
*2020 national average premium per power unit for liability and physical damage coverages.
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:
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.
Furthermore, rideshare drivers may find themselves in a similarly precarious position, as there is a gap between when a driver's personal policy applies and when the coverage provided by the rideshare company kicks in. However, rideshare coverage is becoming increasingly popular and more widely available as an endorsement from personal insurance providers.
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 any standard car insurance policy. We'll go over these as well as some of those more specific to commercial needs below.
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.
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.
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.
Basically, any road-traveling vehicle used for business purposes can be covered by a commercial auto policy. Commercial vehicle types insurers will cover include:
Costs for a commercial auto policy can vary widely from one insurance company to another, but Progressive stated that the average cost for a Progressive commercial auto insurance policy was about $188 per month. 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:
You need commercial auto coverage if you use a vehicle for any business-related purposes, including for deliveries, transporting people and driving to work sites. Also, if a vehicle is titled to a business, it requires a commercial auto policy.
According to Progressive, the average cost of a Progressive commercial auto policy is $188 per month, though averages will differ based on your situation and individual factors.
Yes, but only if they are driving your business-use vehicle and are listed on the policy as permissive users. If the employee is using their own vehicle for any business-related errands you will need non-owned or hired insurance coverage. These coverage types extend liability to vehicles you don’t own outright.
At a minimum, you will likely need workers compensation, commercial auto and general liability to properly cover a food truck.
If you use your own vehicle to deliver pizza or other food, it’s very likely that you need a separate commercial policy. A personal auto policy will not be sufficient if your vehicle is being used to make such deliveries. Those working through app-based food delivery companies may have alternatives available through individual insurers, but you should check with your insurance agent or company to make sure that you’re properly covered.
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 only occasionally used for business purposes. 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.
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.