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Do You Need Commercial Auto Insurance?

Friday, 31 January 2025

If you own a business or have a job that involves the use of a vehicle, the topic of commercial auto insurance has likely come up. Unlike personal auto insurance, which is designed for private use, commercial auto insurance caters to the unique needs of businesses and professionals who rely on vehicles for their operations. In this blog, we will explore commercial auto insurance, how it differs from personal auto insurance, what coverage options are available, and instances when you might need it. Keep reading to learn why having the right commercial auto insurance should be a vital part of your business strategy.
Please Note: This blog provides a general overview of commercial auto insurance. It is not all-encompassing and should not be taken as specific advice. Be sure to discuss your unique circumstances with a licenced insurance broker to ensure your policy aligns with your needs.


What Is Commercial Auto Insurance?

Commercial auto insurance is a form of insurance for businesses that rely on vehicles to conduct their operations. Much like personal auto insurance, it provides coverage for accidents, damages, and liability; however, it is distinct in its design to address the complexities of business use, including coverage for a broader range of vehicle types, industry-specific risks, and business-related claims that personal policies simply do not accommodate.
One of the key advantages of commercial auto insurance is the higher liability limits it offers compared to personal auto insurance. Businesses often face more significant risks and potential claims than individual drivers, as accidents involving business vehicles can result in significant financial losses. Additionally, commercial policies often accommodate several drivers, which is a benefit for companies that rely on a fleet of vehicles to perform their jobs. This flexibility ensures that your business remains compliant with legal requirements and is protected against costly claims.

 

Who Needs Commercial Auto Insurance?

Commercial auto insurance can be tailored to meet the specific needs of a wide range of industries and professions. For example, businesses that transport goods may require coverage for cargo, while those in construction may need policies that account for the specialized equipment installed on their trucks. Here are some common instances where a business might be required to have a commercial auto insurance policy:

  • Delivery Services: Couriers, meal delivery drivers, and package services.
  • Tradespeople and Contractors: Plumbers, electricians, landscapers, and construction workers.
  • Sales and Business Development: When driving a company car to visit clients.
  • Ride-share and Taxi Services: Companies that transport passengers for a fee.
  • Retail and Wholesale Businesses: Companies using vehicles for deliveries or transporting inventory.
  • Logistics and Freight Companies: Businesses operating trucks or trailers.

It’s not just the type of work that matters. The vehicle type plays a role, too. Here are examples of vehicles that might require commercial auto coverage:

  • Pickup trucks
  • Cargo vans
  • Box trucks
  • Flatbed trucks
  • Food trucks
  • Ride-sharing vehicles
  • Buses
  • Utility vehicles
  • Trailers

Please note that this is not an exhaustive list of professions or vehicles that require coverage. If you are unsure whether your vehicle requires commercial auto insurance, speak with a licenced insurance broker for expert advice.

 

Coverage Options to Protect Your Business Assets

When it comes to commercial vehicle insurance, there are several coverages to suit your needs. Like personal auto insurance, there are both mandatory and optional coverages available. The coverage you are required to carry will depend on your provincial guidelines. Below is a list of different coverage types your policy might include:

  • Liability Coverage: Protects against claims for bodily injury or property damage caused by your business vehicle.
  • Uninsured/Underinsured Motorist Coverage: Helps cover costs if your vehicle is hit by a driver without adequate insurance or in a hit-and-run.
  • Accident Benefits: Can help cover medical expenses, rehabilitation, income replacement, and other support services for drivers and passengers injured in a covered accident, regardless of fault.
  • Direct Compensation-Property Damage (DCPD): Covers damage to your vehicle and its contents when another driver is at fault.
  • Collision Coverage: Covers damage to your vehicle in the event of an accident, regardless of fault.
  • Comprehensive Coverage: Protects against non-collision events like theft, vandalism, or natural disasters.
  • Specified Perils: Provides protection for your vehicle against damage or loss caused by specific risks that are listed in your policy, such as fire, theft, lightning, windstorms, hail, rising water, and earthquakes.
  • All Perils: Combines the protection of both collision and comprehensive insurance while also safeguarding against vehicle theft by household members or employees.

Be sure to speak with a BIG broker about these different types of coverage so you can safeguard your vehicles and business assets effectively.

 

How Are Commercial Auto Insurance Premiums Calculated?

Several factors influence the cost of a commercial auto insurance policy, such as:

  • Type of Business
  • Vehicle Type and Usage
  • Employee Demographics and Driving Records
  • Location
  • Policy Limits and Deductibles
  • Number of Vehicles Being Insured

Your broker will help analyze these factors to craft a policy that fits your budget while meeting your needs.

 

Protect Your Business on the Road with BIG


Securing commercial auto insurance is more than just a necessity - it’s a key step to safeguarding the long-term success and stability of your business. With the right coverage, you can protect your assets, minimize risk, and avoid costly setbacks. 
Wondering if you need commercial auto insurance? Contact a BIG broker today for expert advice and help in comparing quotes so that you can tailor a policy that keeps your business moving forward!

 


By: Devon Gribble