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10 Signs Your Business Needs Commercial Auto Insurance


When you run a business, one of the smartest financial moves you can make is to ensure that you have adequate insurance protection. However, many business owners still get confused when it comes to auto insurance. They think their personal car insurance provides coverage for business use. Then, they get into a business-related car accident and discover the expensive truth. Don’t let this costly mistake happen to you.

The facts about commercial auto coverage

Commercial auto insurance and personal car insurance are two completely different types of policies because of the different types risk and liability involved. In fact, most personal auto insurance policies specifically exclude business-related risks, such as the use of a vehicle by someone employed or engaged in a business other than farming or ranching, and the use of a vehicle to transport people or property for a charge, such as providing taxi service or using a vehicle to deliver a pizza.

Quite possibly the biggest reason your personal auto insurance isn’t suitable for your business is the liability limit. Most personal auto policies don’t provide a liability limit nearly high enough for a business, and that’s one place you don’t want to skimp! Just one accident involving a serious bodily injury or death could bring a devastating liability claim against your business. Without adequate liability limits, you could be out of business in a hurry.

Do you need commercial auto insurance? Take this quick 10-point quiz to find out:

  1. Do you use any of your vehicles for pickup or delivery of goods, supplies, or food items?
  2. Do you use any of your vehicles for messenger services?
  3. Are any of your vehicles used for limousine, taxi, or other livery service?
  4. Are any of your vehicles owned or leased by a partnership or corporation?
  5. Do any of your vehicles have equipment installed such as ladder racks or permanent toolboxes that are used to support your business?
  6. Do you lease or rent any of your vehicles to others?
  7. Are any of your vehicles registered or titled to a business, corporation, partnership, or DBA?
  8. Are any of your vehicles driven by employees or non-listed drivers?
  9. Are any of your vehicles equipped with cooking or catering equipment, snowplowing equipment, bathrooms, altered suspensions, or hydraulic lifts?
  10. Does your business use a pickup, van, or utility vehicle with a gross weight exceeding 10,000 pounds, or do any of your vehicles have a load capacity over 2,000 pounds?

If you answered “yes” to any of the above questions, you probably need a commercial auto policy. In general, if a vehicle is used for tasks related to the operator's occupation, profession, or business, it requires a commercial auto policy.

There’s one more way to know for sure if your business needs a commercial auto insurance policy: Contact your independent agent today.