What’s covered by a commercial auto insurance policy

Posted in Auto, Business

commercial van drives through industrial park

A commercial auto policy is important for protecting your business including transporting supplies, products, equipment, your employees and more. Learn more about what commercial auto policies cover, how to get the best coverage for your unique business and find out how you can possibly lower the cost.

What is a commercial auto insurance policy?

A standard commercial auto insurance policy is a type of liability insurance that covers property damage and bodily injury that may result from an accident involving a vehicle used for business. Business car insurance is slightly different from your Businessowners policy (BOP) because a BOP does not cover vehicles. That means you will need a business auto insurance policy in addition to your BOP.

According to the Insurance Information Institute, the most common business liability insurance outlines “autos” as any vehicle that is used specifically for business operations including cars, vans, trucks, trailers or others designed for use on public roadways. That means in most circumstances, if a vehicle is driven on roadways for business use, that vehicle needs commercial auto insurance coverage.

Commercial auto insurance also covers physical damage. The Insurance Information Institute outlines collision, comprehensive and specified perils as the three types of physical damage coverage. Talk to an independent agent to learn more about how these coverages work to help protect businesses and commercial vehicles.

Does my business need a commercial auto insurance policy?

If one or more of the following statements is true, you need business auto insurance: 

  1. You own, rent or lease vehicles used to conduct business.
  2. You and your employees drive to perform job duties. 

Did you know most personal auto insurance policies have an exclusion for business use? That’s why it’s important for employees and business owners to have adequate commercial auto insurance for all business-related use. Commercial auto insurance can also allow employees to use their personal vehicles for business-related use, such as going to the bank.

Some common industries that require a commercial car insurance policy include: 

  • Florists
  • Furniture stores
  • Distributors
  • Food services
  • Retail operations
  • Plumbing services
  • Electrical services
  • HVAC services
  • Landscapers
  • Snowplows
  • Warehouse operations
  • Farms/Ranches
  • Nurseries
  • Trucking/Towing
  • Fisheries
  • And more

To determine the best commercial car insurance coverage for your business needs, talk to an independent agent. The Insurance Information Institute says the recommended minimum is a $500,000 liability policy for small businesses “to cover potential damages in a serious accident” and there are also state minimum insurance requirements businesses must meet.

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How much does business auto insurance cost? 

The cost of your commercial auto insurance policy premium will depend on your unique needs and the size of your business. As your small business grows, your coverage may need to expand.

Talk to a Grange independent agent to learn more about commercial car insurance coverage options and costs. We offer coverage options to meet the needs of your business.

We also offer AutoAccel, which offers flexibility for businesses that require broader driver eligibility criteria than traditional commercial auto insurance for drivers with poor driving history. We like to think of it as our “problem solver” product. Talk to an independent agent today for more details about additional coverage options for your business.

Can I lower my commercial auto insurance expenses? 

Opportunities to save money on your commercial auto insurance policy vary carrier to carrier. With Grange, there are multiple opportunities to save on a policy based on experience, payment method, policy renewal and policy packages.  

Are commercial auto insurance and personal auto insurance similar?

Commercial auto policies work similarly to personal auto policies because they both offer liability and physical damage coverage. The person or business who owns the vehicle is the main difference between the two. Business vehicles must be covered by commercial auto insurance. For employees who use their own cars to do job tasks, there is a specific kind of insurance called hired and non-owned auto insurance. This also applies to vehicles a company rents or leases for business use.

Personal auto insurance tends to be more affordable than commercial auto insurance. Typically, personal car insurance covers the owner and immediate family members who are frequent passengers. Whereas commercial auto insurance covers the business owner, employees and other riders of business-owned vehicles that could include customers or vendors. Typically, there are more potential liabilities in commercial auto insurance and broader coverage, which makes it more expensive.

This article is for informational and suggestion purposes only. Implementing these suggestions does not guarantee coverage. If any policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies. For full details on Grange’s business insurance, coverages and discounts, contact your local independent agent.


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