Commercial Auto Insurance: Best Options for Small Businesses

What is commercial auto insurance?
Commercial car insurance covers vehicles used for business purposes, whether by you or an employee. Any accident-related expenses that arise from injuries, deaths or property damage are covered up to the policy limits.

Commercial auto insurance is sometimes confused with rideshare insurance, which is typically required if you’re a rideshare or delivery driver.

A commercial auto insurance policy typically includes:

Liability coverage, including bodily injury and property damage liability, to pay for injuries, deaths or property damage if a driver causes an accident while working. This coverage may also pay legal fees.

Medical payments, no-fault or personal injury protection, to pay for the medical expenses of the driver and any passengers in an accident, regardless of fault.

Uninsured motorist coverage to pay for injuries and sometimes property damage caused by an uninsured or hit-and-run driver. This coverage may also include underinsured motorist coverage if the at-fault driver doesn’t have enough car insurance coverage to cover all expenses.

Comprehensive and collision coverage to pay for vehicle damage from theft, vandalism, flood, fire and damage if a work vehicle is hit by an object or another car.

Commercial policies could include other coverage, like towing and labor, rental reimbursement and lease gap coverage, but they generally don’t cover tools or other items you’re carrying in the vehicle. A business owner’s policy — which contains commercial property insurance protections — can cover tools owned by the company, while a home or renters insurance policy covers personal belongings in the vehicle.

» MORE: Learn more about the cost of commercial car insurance

Do you need commercial auto insurance?
If you regularly use your car for work — with the exception of commuting — you’ll need a commercial auto policy. You should consider commercial car insurance even if you’re an independent contractor or self-employed full or part time.

You’ll likely need a commercial policy if you:

Drive for cash. Driving friends to a concert or grabbing food for a co-worker is covered by a personal policy, but transporting people or goods for money is not.

Log high mileage for work, such as regular visits to store locations or job sites.

Transport items for work purposes, like heavy tools or equipment.

Have employees driving on your behalf. It’s your responsibility to insure work-related driving, whether or not you own the vehicle.

If you use your car only occasionally for business, your personal policy may offer enough coverage. Check out the scenarios below to see when you may need a commercial policy and when a personal policy is sufficient.

Personal auto insurance

Commercial auto insurance

Grabbing morning doughnuts for co-workers.

Delivering pizzas to paying customers.

Driving friends to a concert.

Driving clients to a work event.

Taking weekend road trips.

Driving to multiple job sites a day.

Commuting to the construction site where you’re working.

Hauling tools and equipment to the construction site where you’re working.

» MORE: What small-business owners should know about commercial car insurance

How to get commercial auto insurance quotes and buy coverage
Follow these steps to get commercial auto insurance.

Decide which vehicles and drivers you need to insure. You’ll probably need U.S. Department of Transportation or vehicle identification numbers for each vehicle and driver’s license information for each driver to get quotes.

Determine how much coverage you need. Insurers typically recommend carrying $1 million in liability protection, according to the Insurance Information Institute. How much collision and comprehensive coverage you need may depend on the size of your fleet, the age of your vehicles and other factors.

Get multiple quotes. Comparing business insurance quotes can help you ensure you’re getting the coverage you need for the best price. You can get quotes online in minutes from Progressive, Allstate and Geico or from online business insurance companies.

Buy a policy. Some providers will connect you with an agent to complete your purchase. In other cases, you may be able to buy your policy online on your own.