Commercial Auto Insurance

Embroker helps you get commercial auto insurance to protect you, your employees, and any other hired drivers against financial responsibility in the case of a work-related accident involving injury to people or property.

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What Is Commercial Auto Insurance?

Commercial auto is also referred to as business auto insurance, commercial vehicle insurance, commercial car insurance, truck insurance, or fleet insurance—depending on what types of vehicles you need to insure.

The coverage itself is pretty self-explanatory; a commercial auto policy protects your company against financial responsibility if you or an employee is at fault in an accident involving injury to people or property. It also protects your vehicles from losses resulting from theft, vandalism, certain weather events, and collisions.

Anyone who has ever purchased commercial auto insurance knows that picking the right policy is significantly more complicated compared to purchasing insurance for your personal vehicles. This is because commercial vehicles are exposed to a greater variety of risk on an everyday basis.

Commercial auto insurance does not just protect you and your assets as the business owner, it protects your employees and any other contracted drivers that you might have hired for business purposes of any kind.

A majority of U.S. states make it mandatory for business owners to purchase liability insurance for both property damage and bodily injury that could occur as a result of one of your vehicles getting into an accident while you or one of your employees is operating it. You can also get physical damage coverage for all of the vehicles your business uses, whether you own, lease or hire the vehicles.

As we’ve mentioned, commercial car insurance is fairly nuanced, with a number of different types of coverages available that can be added on to your base commercial auto policy in order to address a variety of situations:

Who Is It For?

In most cases of commercial auto insurance, three categories of people are covered: the named (you), permissive users, and omnibus users.

Naturally, the named insured has the broadest coverage in your average commercial auto policy. It is important to note that as the named insured, you would also be covered in the case of an accident in which you were not a participant. Since employers are technically and vicariously liable for the negligent acts of their employees, you could be sued for such an act, in which case your commercial auto insurance would provide coverage.

Permissive users are people who are driving a covered vehicle that you own, hire or borrow, with your permission to do so. Omnibus insureds include anyone who is liable for both your conduct and the conduct of the permissive users. Basically, this means that coverage is provided to anyone who could potentially be held legally responsible for an accident caused by the named insured or the permissive user.

Permissive users are all employees who drive vehicles you own, hire or borrow for the needs of your businesses, assuming that all of the business vehicles that are being used are covered by your insurance policy.

The widest coverage would include covering all of the vehicles that you need for business, regardless of whether you own them. For example, if your policy only covers vehicles that you own and an employee gets into an accident while driving a vehicle that your company is renting, you will not be covered. Sign up to the Embroker platform, select your preferred coverage, and get a commercial auto insurance quote in just a few minutes.

It’s also important to note that most commercial auto policies do not cover employees who get into accidents while driving cars that they own, even if they were using the vehicle on company business.

Why Do You Need It?

Most personal auto insurance policies do not cover any type of commercial claims. This means that if you get into an accident in your personal car while you are operating it for business purposes, there is no duty to defend the claim and no indemnification of damages covered by your personal auto insurance.

In simple terms, this means that you would have to pay your legal costs and the damages out of your own pocket–your personal auto insurance would not cover anything.

If the vehicle in question is primarily used for business purposes, you should get commercial auto insurance coverage, since most personal auto policies – whether yours or that of one of your employees – do not provide coverage for business-related accidents and incidents.

Commercial Auto Insurance Requirements By State

When purchasing commercial auto insurance, it’s important to note that the amount of insurance you are going to have to purchase will be defined by either state or federal laws. Each state has its own set of laws regarding insurance requirements related to characteristics of your fleet such as the weight of each vehicle and the number of passengers that each vehicle can accommodate.

Both the type of vehicle and the type of job it performs are other factors that are taken into consideration. For example, if your commercial vehicle carries hazardous materials, there will be specific federal requirements that you will need to meet in terms of coverage limits.

However, in most cases, small business owners that operate light vehicles such as sedans or pickup trucks will usually have state requirements to meet that are similar to the ones assigned to auto insurance for personal vehicles.

Personal Auto Insurance vs. Commercial Auto Insurance

It’s often hard for small business owners to tell what the real difference between personal and commercial auto insurance is and why they would need both types of insurance if they use their personal vehicles for work purposes.

If a small business owner or one of their employees uses a personal vehicle to perform business tasks such as picking up clients or delivering goods, it’s important to know that their personal auto insurance will not cover any damages if an accident occurs while they were driving the vehicle for business reasons.

Personal auto insurance policies almost always exclude business use. If you’re a sole proprietor and you are using your personal vehicle for business on a regular basis, the best course of action would be to purchase a commercial auto policy as well.

Another common question people ask is whether personal auto policies cover accidents that occur while driving to work. They will. And that’s another important distinction to note. A personal auto policy covers accidents that occur if you are driving “to work,” but it won’t cover accidents that occur when you are driving “for work.”

Since commercial auto policies tend to cover many more circumstances of bodily injury and property damage than personal auto policies cover, it only makes sense that commercial policies will cost significantly more to procure.

What Does Business Auto Insurance Cover?

Before we get to the question of what your commercial auto insurance policy will cover, there’s another important question to think about: Who will the policy cover?

There are three categories of people that can be covered by commercial auto insurance; the named insured, permissive users, and omnibus users.

If it’s your business and you’re taking out the policy, then you would be the named insured and you would have the broadest coverage possible. The named insured will usually be covered even if they didn’t participate in an accident directly.

Permissive users are your employees or anyone else you have given permission to drive the vehicle for which you have purchased coverage. Omnibus users are people who can be held liable for any accident or negligence committed by you or your permissive users.

For example, if your drivers are making a delivery in the name of one of your clients, that client could be considered an omnibus user. That means that they can’t be held legally responsible for mistakes made by your driver, even if the driver was delivering something for their business.

As far as coverage goes, commercial auto insurance functions just like most other insurance policies, in the sense that there are basic things that standard policies will always cover along with additional coverages that can be added to your policy via endorsement or rider.

The Basics

Common Endorsements

Types of Vehicles Typically Covered

As already noted, commercial auto insurance will cover business vehicles that are either owned by the business or the individual that is using the vehicle for business purposes. The types of vehicles that can be covered by a commercial auto policy are manifold and include the following:

If you need to purchase insurance for larger commercial vehicles such as trucks, it’s best to purchase commercial truck insurance, which is specifically designed to provide coverage for larger vehicles and the risk profile that comes with operating such vehicles commercially.

What’s Not Covered?

As with just about any type of insurance, there are exclusions when it comes to commercial auto insurance for risks that are either uninsurable or covered by other types of insurance policies, including:

What Does Commercial Auto Insurance Cost?

Obviously, the more endorsements you add to your commercial auto policy, the more you’re going to pay. But that is certainly not the only thing that defines your premium. Businesses are all different and not every company uses the same vehicles in the same way.

Certainly, the industry that you are working in is going to be one of the defining characteristics that influences the cost of your auto insurance. Let’s take a look at what else insurers are going to be evaluating when putting together your commercial auto policy and calculating your premium.

Factors That Influence Cost of Coverage

Why Get It With Embroker?

Easy.

Purchasing auto insurance has never been easier. The entire process takes place online and can be completed in a matter of minutes, not days.

Affordable.

Purchasing auto insurance policy’s digitally saves a lot on overhead. These savings are passed on to business via our very competitively-priced premiums.

Complete.

Our expert brokers will work with you to make sure that your commercial auto policy is custom tailored to cover all possible risk exposures your business may have.

Human.

The purchase process is easy to complete online, but if you do need assistance, our insurance experts are standing by to help via email, phone, and live chat 24/7.

Still In Doubt?

Five children and two adults were killed in a multiple-vehicle crash on their way from Louisiana to Walt Disney World. The mother of one of the victims filed a lawsuit against the company of the truck driver involved in the crash.

See: Mother of fatal I-75 crash victim filing lawsuit against truck company

A Detroit woman who was a passenger in a high-speed collision while riding in a Lyft sued both Lyft and Uber ride services for millions of dollars, alleging that her driver was distracted by pickup notifications, causing him to crash.

See: Injured Detroit woman sues, blaming Lyft and Uber for crash

A former trooper with the Wyoming Highway Patrol sued the owner of a food delivery truck that turned in front of his patrol car and caused a head-on crash in 2015. The trooper sought compensation for the injuries sustained in the collision.

See: Former trooper sues trucking company over vehicle crash

A Coca-Cola truck collided with a van and slammed into scaffolding outside a Bronx apartment building. In this case, the Coca-Cola company was liable for the damages caused by the accident. The insurance company would cover the damages to the victims, the property and all other costs.

See: Coca-Cola truck hits building in deadly Bronx crash

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The information provided on this website does not constitute insurance advice. All content and materials are for general information or illustrative purposes only. Services and pricing may vary by state, and are subject to application and underwriting requirements. Log in to complete your application or contact one of our licensed insurance professionals for advice on your specific business insurance needs. Embroker Terms apply.