Do I Need Commercial Auto Insurance?

As a business owner, you’ve probably asked do I need commercial auto insurance more than once.

If you’ve ever met clients, driven errands, or hauled materials in your vehicle for work, then the answer is yes. That’s because your personal auto insurance policy might not give you the coverage you need in the event of an accident.

Commercial auto insurance is designed to offer comprehensive protection for businesses that use vehicles for their operations. It’s something business owners like you should consider getting. This guide explains the reasons why.

Commercial Auto Insurance vs Personal Auto Insurance 

Unlike personal auto insurance policies with standardized coverage options, commercial auto insurance offers greater flexibility to tailor protection to your business’s needs. Below we look at the breakdown of the gap in protection between commercial auto insurance vs. personal auto insurance.

Liability Coverage 

Liability coverage protects your business from having to pay out-of-pocket for injuries or property damage caused to third parties in the event of an accident involving a commercial vehicle. This insurance would cover medical expenses, lost wages, and car repairs for the injured parties, safeguarding your business from financial ruin.

Collision Coverage 

This coverage pays for repairs to your company vehicle if it’s damaged in a collision with another vehicle or object. Whether you hit a parked car while maneuvering at a job site or swerve to avoid a hazard and collide with a guardrail, collision coverage ensures your business vehicles get back on the road quickly, minimizing downtime.

→ Read more: How To Write A Property Damage Report For Vehicular Accidents

Comprehensive Coverage 

This coverage goes beyond collisions and guards your company vehicles against various perils, such as theft, vandalism, fire, weather events, and even damage caused by animals. Imagine a hailstorm damaging your company car or work truck parked overnight at a client’s location. Comprehensive coverage reimburses you for repairs or the vehicle’s value if it’s totalled.

Image source: Canva

Uninsured/Underinsured Motorist Coverage 

This protects your business in situations where the driver who caused the accident doesn’t have adequate insurance or doesn’t have insurance. If you or your employees are injured, these scenarios can leave you financially responsible for vehicle repairs and potentially even medical bills.

Tools and Equipment Coverage 

This auto commercial coverage protects valuable tools and equipment stored or transported in your business vehicle. This can be a lifesaver for contractors who rely on specialized tools for their work. 

Towing and Labor Coverage 

It reimburses towing expenses if your business vehicle breaks down or needs to be towed from an accident scene. This coverage often includes on-site labour charges for jump starts, flat tire changes, or minor roadside repairs that can get you back up and running quickly.

Employee Coverage 

This coverage extends liability protection to your business if an employee gets into an accident while driving their vehicle for work-related activities. Employee coverage includes medical expenses, lost wages, and car repairs for the injured party.

Image source: Canva

Why Businesses Need Commercial Auto Insurance 

Commercial vehicle insurance saves you from paying out-of-pocket in car emergencies, making it an essential investment for small business owners like yourself. Let’s get into more detail below.

Broader Liability Coverage 

Most personal auto insurance policies only cover incidents involving the insured vehicle used for personal purposes. Commercial auto insurance, however, offers broader liability coverage, covering your vehicle if it becomes involved in an accident while used for work. It covers you for injuries or damage to other people’s property.

Higher Coverage Limits 

The nature of your work might involve transporting expensive equipment or materials. Commercial auto insurance typically offers higher coverage limits compared to personal car insurance, ensuring you have adequate financial protection in case of a serious accident.

Customized Coverage Options 

Commercial auto insurance can be tailored to what your business needs. You can opt for coverage for tools and equipment in your vehicle, towing expenses in case of breakdowns, and even protection against uninsured or underinsured motorists.

When Do I Need Commercial Auto Insurance? 

If you’re still unsure about the benefits of business car insurance vs personal auto coverage, there are some clear-cut situations where the latter becomes necessary.

Using Your Vehicle for Business 

This is the most common scenario. Any time you use your own car to haul materials, meet clients at job sites, run errands for your business, or even travel to pick up supplies, you’re operating outside the scope of your personal auto insurance policy. An accident during such activities could leave you financially liable for damages and injuries.

Owning Company Vehicles 

You need a commercial auto policy if your business owns trucks, vans, or any other heavy equipment used for work purposes. These vehicles are essential equipment for your business, and proper insurance ensures they’re financially protected in case of accidents, thefts, or vandalism.

Hiring Employees Who Use Their Personal Vehicles 

Do you have employees who use their cars for business purposes, like to visit clients or make deliveries? In such cases, you need proper insurance coverage so you and your employees won’t shoulder any accident costs. You can consider adding them to your commercial auto insurance plan.

Where Do I Get Commercial Auto Insurance? 

Now you understand the clear advantage of commercial auto insurance vs personal insurance for your contracting business, it’s time to get protected. Trust Contractors Insurance for your business’s commercial auto insurance needs.

As Ontario’s leading commercial insurance brokerage, we specialize in crafting personalized plans specifically for busy business owners like you. Our team of experts will simplify the process, explaining your commercial auto insurance policy details, coverages, limitations, and exclusions in clear terms. You can count on us to be a reliable resource, ready to answer your questions and guide you throughout the underwriting process.

Contact us today and let our experts help you build a secure future for your business.