What’s the Difference Between Commercial & Business Auto Insurance?
Are you hitting the road more than usual for work? Whether you’re an employee, contractor, or entrepreneur, it’s common to wonder if your current auto insurance has you fully covered.
We’ve noticed many business owners have questions about their auto insurance coverage, especially when it comes to understanding the differences between business and commercial policies. Since it’s a common topic in our conversations, we wanted to share some helpful insights so you can feel confident about your coverage and make informed decisions.
COMMERCIAL AUTO INSURANCE VS. BUSINESS AUTO INSURANCE
While both options overlap to some degree, each policy provides individualized solutions based on specific circumstances. In turn, your choice between these options primarily depends on how you use your vehicles for business, the types of transportation, and the scale of your operations. Here’s how to think of both.
BUSINESS AUTO INSURANCE
Auto insurance for businesses, or a Business Automobile Policy (BAP), covers vehicles you or an employee use to fulfill regular job duties. These can be employee-owned vehicles or those purchased by your company. This type of policy is ideal for smaller businesses or sole proprietors who use standard passenger vehicles for business activities like meeting with clients, running errands, or handling other light work-related tasks.
WHAT IS COVERED UNDER A BUSINESS AUTO POLICY?
The exact coverage depends on your policy. Nevertheless, a business auto policy, or BAP, typically includes:
- Liability for accidents you cause
- Damage to your vehicle
- Medical payment support
- Uninsured/underinsured motorist coverage
- Rental reimbursement coverage
- And other curated needs
COMMERCIAL AUTO INSURANCE
Commercial auto insurance is designed for businesses that operate larger fleets or specialized vehicles, such as trucks, delivery vans, or vehicles used in industries with higher risks, like construction or transportation. This type of coverage typically applies to vehicles such as box trucks, food trucks, semi-trucks, or those carrying equipment essential to the business’s operations.
Fleet insurance can differ from commercial auto insurance. Fleet insurance is designed specifically for businesses with multiple vehicles – typically five or more. In sum, while fleet insurance is a type of commercial auto insurance, not all commercial auto insurance is classified as fleet insurance unless it covers multiple vehicles.
WHAT IS COVERED UNDER A COMMERCIAL AUTO POLICY?
Commercial auto plans also provide liability and comprehensive coverage similar to business auto policies. However, a policy is often more individualized by insuring:
- Coverage for specialized vehicles (like food trucks, catering vans, dump trucks, etc/)
- Multiple vehicles under one policy
- Special equipment or modifications
- Non-owned vehicle coverage
- And other custom needs
WILL MY PERSONAL AUTO INSURANCE SUFFICE FOR BUSINESS?
Unlikely. Personal auto insurance typically excludes business and professional use. Plus, if you’re using your vehicle for work beyond commuting, you’re probably not covered. Regular business driving, transporting goods or people, or using specialized vehicles often require business or commercial auto insurance.
CONTACT US FOR BUSINESS AUTO INSURANCE & MORE
Choosing the right policy depends on your specific business needs. Factors like vehicle type, usage frequency, and business size all play a role. Our experienced agents can assess your situation and recommend the perfect coverage to protect your business and its fleet.
Give us a call or contact us online to discover the difference partnering with a leader in insurance can make.
