When does a business owner need a commercial auto policy?

As a business owner, when do I need to have a commercial auto policy?

This question comes up often when we talk to business owners about their insurance needs.  Almost every business owner we work with should have some type of commercial auto insurance in place.  Some think they don’t need to put their personally owned vehicle on an auto policy because it’s covered on their personal auto policy.  Unfortunately, it’s not that simple. 

We put together a quick 4-question guide to help business owners determine if their vehicle should be insured on a commercial auto policy.

  1. I transport goods, equipment, materials, or people (think: employees) to a jobsite, do I need a commercial auto policy? YES – if you transport any items on the above list or have employees do it on your behalf, then yes, you absolutely need a commercial policy.  General liability policies typically exclude any auto-related claims so the only way to get liability protection for your business would be to have a commercial auto policy in place.  If you’re a professional (think: lawyer, realtor, CPA, financial planner, etc) and you’re using a personally owned vehicle to visit clients, attend showings, etc, you should check that your personal auto policy does not EXCLUDE business use vehicles and you should be okay.
  2. I have logos, magnets, vehicles wraps, branding markers or call-to-action that bring attention to my business, do I need a commercial auto policy? YUP – having any kind of branding on your vehicle would warrant putting that vehicle on a commercial policy.  Some personal auto policies do completely EXCLUDE business use of a vehicle, so you should make sure that your business is covered by a commercial auto policy.  Especially if you’re allowing an employee to drive that vehicle.
  3. I titled the vehicle in the name of my business for a tax-break, do I need a commercial auto policy? ABSOLUTELY!  We get it.  As a business owner, we’re all looking for ways to save from having to pay Uncle Sam and titling a vehicle in the name of business for that depreciation deduction on your taxes, but that also means exposing your business to liability only covered by a commercial auto policy.  Make sure you put that vehicle on a commercial auto policy in the name of the business!
  4. I have a contract that requires additional insured language, high limits of liability or special wording, do I need to have a commercial auto policy?  Yes – most personal auto policies cannot accommodate special verbiage required by an additional insured so you will need to insure that vehicle on a commercial auto policy.   

If you answered YES to any of the questions above, you should be insuring your vehicle(s) on a commercial auto policy.  Businesses are at greater risk of being called into a lawsuit, especially with the amount of personal injury attorneys with advertising including the following ask: “Have you been hit by a company vehicle?”.  General Liability policies are not catch-all coverage.  Don’t rely on just that coverage to protect your business and owned assets. 

Need to have your business insurance coverage analyzed?  Get started by filling out our online questionnaire here.

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