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What is Commercial Auto Insurance?

Commercial auto insurance is the insurance you need if your business uses any kind of vehicle, from a small sedan to a construction vehicle. For businesses that rely on their vehicles, business car insurance or commercial truck insurance provides a safety net in cases of accidents involving equipment, employees, or third parties. Whether your employee drives over an icy patch and hits a pole or you’re loading heavy equipment and accidentally smash a window, your commercial vehicle insurance has your back. It is the policy that covers the cost of damages and injury while keeping your vehicle on the road so that you can keep on working.

What’s Important About Business Vehicle Insurance?

For many businesses, vehicles are a major business expense and an essential part of day-to-day operations. But do you really need more than personal car insurance? Here are a few reasons you may want to upgrade to a commercial auto policy:

Staying Legal
You may not have a choice. Depending on your business, you may be legally required to have a business auto policy. Make sure to look into this if you:
• Are paid to transport people or products
• Have employees (other than yourself) who operate your vehicle
• Haul a trailer or heavy equipment
• Provide a service using your vehicle directly

High Stakes
Your business needs are not the same as your private needs. Depending on your business, you may need more extensive coverage for hazardous materials, dangerous equipment, or heavy loads. Your business vehicles face different risks than your private family car and might need to be covered differently.

Broad Coverage for Broad Needs
Your business needs are not the same as your private needs. If you have employees, you need a policy that covers them if they cause accidents. Depending on your business, you may need more extensive coverage for hazardous materials, dangerous equipment, or heavy loads.

Demonstrating Professionalism
Especially if your vehicle is directly connected to the service you provide, commercial insurance is important for your customers. It proves that you’re prepared for anything and that you have a support system. Your business will not fall apart if things don’t go as planned and you’ll be able to provide reliable service no matter what. Your customers will know they can trust that you’re a serious professional who takes care of all the details they need.

What Does Commercial Vehicle Insurance Actually Cover?

Insurance coverage depends on a number of factors specific to your policy or claim. At a high level, commercial auto insurance generally covers the following situations:

Bodily Injury/Property Damage
Bodily injury is the section of your commercial vehicle policy that covers claims of physical injury to a third party. It can include medical expenses, legal fees, loss of income, pain and emotional damage, and even funeral expenses. Imagine you spend much of your workday driving between client sites. You’re on your way to a job and don’t notice that they’ve put in a new stop sign. You drive right through and hit a car coming from your right, causing injuries to the driver. Your commercial auto insurance could cover her medical bills and reimburse her for the days she’s out of work recovering.

Property damage is the section of your policy that includes third party coverage for property damage (e.g. car damage) in an accident where you are at fault.
It could also include legal fees and other expenses similar to bodily injury, but is specifically related to damage to property, rather than to people.

Personal Injury
In this case, personal injury covers you and your employees, rather than third parties. So if your employee is delivering some equipment in your truck, loses control of the wheel and is injured, your policy could cover his medical expenses.

Collision Coverage
You rely on your vehicles to work. That’s why it’s important that your insurance cover damage to vehicles and not just people. This section pays for repairs or replacement vehicles if your car or truck was involved in a crash with another car or telephone pole, or even had a rollover in icy weather. If you can’t do your job without your vehicle, like plumbers who may carry their tools around, or general contractors who may move equipment between work sites, you know how critical it is that you always have a vehicle you can use for your business.

Comprehensive Coverage
This section also covers your vehicles, but in cases other than collisions. Comprehensive coverage could help you repair or replace your vehicle after theft, vandalism, or weather-related damage. If a tree falls on your truck or your car gets flooded during a storm, this is the section that you’ll rely on. While you can prevent lots of mishaps by being careful, there are some that you just can’t anticipate, and this coverage is for some of them. Just make sure to check out the exclusions to find out exactly what isn’t covered. Keep reading for some examples.

Accident liability

You cause an accident that totals a $50,000 car and injures the driver and passenger.

Rental reimbursement

Your car is in the shop after an accident. You rent a car for 15 days, at a cost of $75 per day.

Underinsured motorists

Another driver hits you and totals your truck. They don’t have enough coverage to replace it and cover your medical bills.

Towing and labor reimbursement

Your vehicle overheats and needs to be towed to a shop, leaving you with a $200 towing bill.

Your Commercial Auto Insurance Options

Basic

Bodily Injury and Property Damage

$50,000 limit
$0 deductible

Comprehensive and Collision

Not included

Medical Payments

$5,000 limit
$0 deductible

Uninsured and Underinsured Motorist Bodily Injury

$50,000 limit
$0 deductible

Pro

Bodily Injury and Property Damage

$100,000 limit
$0 deductible

Comprehensive and Collision

Actual cash value
$500 deductible

Medical Payments

$5,000 limit
$0 deductible

Uninsured and Underinsured Motorist Bodily Injury

$100,000 limit
$0 deductible

Pro Plus

Bodily Injury and Property Damage

$1,000,000 limit
$0 deductible

Comprehensive and Collision

Actual cash value
$500 deductible

Medical Payments

$5,000 limit
$0 deductible

Uninsured and Underinsured Motorist Bodily Injury

$1,000,000 limit
$0 deductible

What Isn’t Covered by Commercial Auto Insurance?

Every insurance policy has exclusions – in the case of commercial auto insurance, we’re referring to things that can happen to your business vehicle that aren’t covered by your insurance policy. It’s important to know what these are in advance. For example, a window broken during a theft may be covered while a window broken during a political riot may not be. Exclusions often include accidents involving certain other types of vehicles or damage done when the vehicle was being driven by family members rather than the business owner or employees. They also generally don’t include intention damage, such as if you ran into someone on purpose.

Be sure to check what exclusions in your policy may be covered by other types of insurance. For example, if a customer closes his fingers in your car door and needs an x-ray, will the bill be covered by commercial vehicle insurance or by your general liability policy?

Ridesharing service use

Ridesharing service use

Vehicles with more than 2 axles

Vehicles with more than 2 axles

Drivers under 18 years of age

Drivers under 18 years of age

Food trucks

Food trucks

This is a brief summary of your policy and does not supersede the policy documents. If you want full details, please call us.

Calculating Average Commercial Auto Insurance Cost

You will probably notice a wide variety of commercial auto insurance quotes, which can easily range from $750-$3,000 per year. Your specific cost will depend on the number of vehicles you’re insuring, but also on the vehicle type, how you use them, who you expect to drive them, and what type of business you have.

In order to get an accurate, cost-efficient commercial vehicle insurance quote, choose a policy that is customized for your particular field. You can also look for monthly payment options and online claims filing service to make dealing with your insurance easier.

FAQ

What is the Live Certificate?
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The Live Certificate is the digital alternative to paper/downloaded Certificates of Insurance. It’s completely online proof of insurance which you can easily and instantly share with anyone, by email or through a link.
Who is Next Insurance?
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We're a group of designers, engineers, and insurance geeks based in Palo Alto, California. We want to use our deep industry experience at companies including Intuit, American Express, PayPal, Check, and Oracle to transform insurance for small businesses. We're an insurance agency licensed in all 50 states.
What does Live Certificate cost?
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It’s free to all Next Insurance customers. It’s also unlimited; send as many Live Certificates as you need, anytime.
Can I add an additional insured to my Live Certificate?
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Yes! When you click "Share Proof of Insurance" from within the customer portal, you'll be asked if you need a general proof of insurance or one with a venue or client as additional insured. As soon as you input the details of the additional insured you're adding, you can add their email address and we'll send them over the certificate for you.
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