Does your small business need commercial auto insurance? 

Whether you own your own manufacturing business or trucking and delivery service, as a small business owner, you’re likely used to juggling risk.

If your business requires a commercial vehicle to get you from one job to the next, you’ll need coverage from a commercial auto insurance policy. Educating yourself on the vehicles that commercial auto insurance covers, the options available, and the difference between personal and commercial auto insurance will help you to make the right investment.

Read on to learn everything you need to know to be informed when shopping for a commercial auto insurance policy.

What vehicles does commercial auto insurance cover?

Commercial auto insurance covers any vehicles used for business purposes, including company-owned vehicles or personal vehicles used on the job. The types of vehicles covered by a commercial auto insurance policy include:

    • Company cars
    • Work vans
    • Dump trucks
    • Delivery vans or trucks
    • Forklifts or other construction vehicles
    • Food trucks 

If your small business uses any of these vehicle types for work purposes, you’ll need to get coverage with a commercial auto insurance policy.

What are the different types of coverage options?

The type of small business insurance you’ll need will be different if you run a landscaping business, for example, compared to a delivery business. This is because of how much time you’ll spend on the road, the type of vehicles you’ll be driving, and other factors.

To build your commercial auto insurance policy, it’s recommended that you work with an experienced insurance agent. They’ll walk you through the different types of coverage options available and tell you what they recommend for your particular business.

Here’s a summary of the different types of coverage options for your policy:

    • Collision covers the cost to repair any physical damage caused by an auto collision or accident.
    • Commercial auto liability protects you and your assets in the event another driver sues your business after a collision with one of your work vehicles.
    • Comprehensive covers you and your business in case of theft, vehicle damage caused by weather, or any other damages that occur without an accident ensuing.
    • Personal injury protection or medical payments covers any medical expenses in the event an employee or any other occupants of your vehicle are injured in an accident.
    • Rental reimbursement covers the cost of a rental vehicle should your work vehicle need repair from an accident or collision.
    • Uninsured or underinsured motorist coverage covers the cost for repair or medical bills should the driver not have personal auto insurance or insufficient coverage. 

What coverage should my commercial auto insurance policy include?

When shopping for a commercial auto insurance policy, consider the type of coverage you’ll need based on the risks of your industry and the type of vehicles your business owns and operates.

For example, an electrical, plumbing, or HVAC business would likely need a truck or sprinter van that can store and carry the tools and materials needed on the job. The insurance policy may have higher comprehensive coverage to replace expensive equipment in case of theft.

A manufacturing business, on the other hand, may need commercial auto insurance to cover forklifts or other construction vehicles. Their policy may include higher personal injury protection coverage in the event of a workplace accident involving these vehicles.

What’s the difference between personal and commercial auto insurance?

Although both personal and commercial auto insurance protect you financially in the event your vehicle is involved in an accident, the coverage you receive from a personal or commercial insurance policy is vastly different.

Personal auto insurance

Personal auto insurance covers any accidents, damage, or theft that may occur when you’re driving your vehicle for personal use. It won’t, however, cover any accidents that occur when driving your personal vehicle for work purposes, like traveling to meet clients or completing deliveries.

Commercial auto insurance

Commercial auto insurance protects your entire small business in several ways. It covers medical expenses for any employees injured while driving a company vehicle. It also covers the cost to repair any physical damage to a work vehicle after a collision or accident along with rental expenses to keep your small business moving. And it protects a small business owner financially should another driver on the road choose to sue your business after a collision.

Commercial auto insurance is also typically more expensive than personal auto insurance because of the amount of coverage the policy includes.

Not covered yet?

Operating a vehicle for your business comes with risks. Even the safest driver can find themselves in circumstances out of their control, and no one wants to be stuck paying the cost of repairs out of their own pocket.

Luckily, commercial auto insurance can help you avoid expensive repairs and keep your carpentry business running smoothly. Think you may need a commercial auto policy? Get a quote with Pie!