What is Commercial Auto Insurance?

Businesses that own vehicles generally need to insure those vehicles, just as individuals have to insure their personal automobiles. Not purchasing commercial auto insurance, or business auto insurance, for any vehicles that it owns leaves a business exposed to legal consequences, possible financial loss and potential liability lawsuits.

Business auto insurance is a form of auto insurance that’s made for businesses, rather than individuals. Policies are written with the risks that businesses face and the coverages they need in mind.

What Businesses in Need Business Auto Insurance?

Most businesses that own vehicles which are driven on public roads need commercial auto insurance that at least meets the state’s minimum requirements. Businesses often purchase more than the state’s minimum requirements, because they often want more protection than the state requires.

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Some examples of businesses that may need coverage are:

  • Taxi cab companies
  • Limousine companies
  • Delivery services
  • Landscapers and snow plowers
  • Contractors that go to job sites

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What is Non-Owned and Hired Auto Insurance?

Even a business that doesn’t own a vehicle but has employees use their personal vehicles for work may need business auto insurance. Personal auto policies often don’t provide coverage for regular work-related driving (commuting to and from work is typically not considered a work-related duty and is covered by personal policies).

For example, a pizza place that provides delivery might need coverage for when drivers are using their vehicles to deliver pies to customers. It the pizzeria doesn’t obtain a commercial policy, its drivers may not be fully protected while they’re making deliveries.

A non-owned or hired auto insurance policy is an auto policy that’s uniquely designed for businesses that rely on others’ vehicles. These policies provide the coverages that pizza places and similar businesses that regularly use vehicles they don’t own need, without adding extraneous coverages that would drive up premiums unnecessarily.

What Protections Does Commercial Auto Insurance Provide?

Business auto policies often provide coverages that are identical or similar to those found in personal auto policies. Some coverages that many businesses get through their business auto policies include:
  • Property Damage Liability, which usually covers damage caused to other people’s property
  • Bodily Injury Liability Coverage, which may cover injuries that other people sustain
  • Personal Injury Coverage, which can help cover injuries that the driver and passengers sustain
  • Comprehensive and Collision Coverage, which is often used to cover the vehicles a business owns
  • Uninsured and Underinsured Motorist Coverage, which might help pay for damage and injuries caused by a driver who doesn’t have sufficient insurance

As is the case with personal auto policies, the exact coverages included in business auto policies can vary.

Make Sure You Have the Right Coverage

How Can Businesses Compare Commercial Auto Policies?

Businesses can find the best commercial auto coverage for the lowest rate by talking with an independent insurance agent near them. They should specifically seek out an independent commercial agent, as an agent who specializes in commercial policies will be familiar with the risks that businesses face and coverages they need. Being independent, the agent will be able to request several commercial auto insurance quotes from different insurers in the state, so businesses can look at various company’s offerings and find the one that best meets their needs.

Meet Your Industry Specialist

Jeff Kroeger

Principal, Senior Vice President, and Head of Commercial Lines, Mr. Kroeger also manages the company's hospitality book of business and is that unit's primary producer. He is a graduate of Montclair State University and was named a 2015 Young Gun Insurance Business America.

Jeff has been providing exceptional insurance for restaurants, bars, nightclubs, and more for many years. He understands the unique challenges this industry faces and delivers the right coverage at an affordable price.

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