What is Commercial Vehicle Insurance?

Row of Commercial Vans Parked in Parking Lot

Do you run a small business? Do you use a vehicle primarily for work purposes? Then you should get commercial car insurance. Many people mistakenly believe that commercial auto insurance is essentially semi-truck insurance reserved for big rigs and other larger vehicles that haul products, but it is much more than that. Insurance for commercial vehicles is necessary for many small business owners or freelancers to make sure that their business vehicle is covered since there are bigger liability issues for a business vehicle involved in an accident that a personal policy won’t fully cover.

Since most people are unfamiliar with commercial car or truck insurance, here is a brief FAQ that answers some of the most common questions along with information on how to get a free commercial vehicle insurance quote.

What is Commercial Vehicle Insurance?

Commercial auto insurance is an insurance policy protecting vehicles that are designated for business use. This also applies to commercial van insurance and commercial truck insurance.

What Does Commercial Vehicle Insurance Cover?

Commercial auto insurance can cover a variety of situations and is sometimes customizable depending on which insurance company you use. There are a lot of different options available from insurance provider to insurance provider, but many commercial car insurance policies provide:

  • Liability for bodily injury to others
  • Property damage liability
  • Person injury coverage to you, your employed drivers, or your passengers including lost wages and medical expenses.
  • Collision coverage, regardless of fault
  • Comprehensive coverage for damage other than the collision
  • Medical payment coverage for hospitals, treatment, and/or funeral expenses
  • Uninsured/Underinsured motorist coverage
  • Non-owned auto coverage in case you or your employee gets in an accident with a rented or borrowed vehicle
  • Liability for injuries, broken equipment, damaged product, or accidents caused while loading or unloading a vehicle
  • Coverage for roadside assistance, towing, and labor costs

There are also expanded policies available that further protect your employees and your business assets in the event of a lawsuit.

Why Do I Need Commercial Vehicle Insurance?

You need commercial car insurance for any vehicle used for business because a personal policy will not and cannot provide proper coverage. Insurance for commercial vehicles is specialized to cover collisions, property damage, injury, and liability claims you or your employee(s) may incur when using your business vehicle. This not only helps protect you, your employee(s), and business assets, but in many cases commercial auto insurance or commercial truck insurance is required by law.

When Do I Need Commercial Vehicle Insurance?

You need to get a commercial car insurance policy if:

  • You use your vehicle to conduct a service
  • You charge a fee to use your vehicle to transport goods or people
  • The nature of your work requires higher limits of liability
  • You haul a considerable weight or equipment/tools or tow a trailer used to conduct your business
  • Ownership of the vehicle is in the name of a corporation or partnership
  • Employees operate the vehicle

Some examples of vehicles that require a commercial vehicle insurance policy include:

  • Cars, sports utility vehicles, and pick-up trucks used in business
  • Vehicles outfitted with work equipment
  • Tow trucks
  • Dump trucks
  • Box trucks
  • Snow plows
  • Limousines
  • Taxis
  • Flatbeds
  • Utility vans
  • Semi-trucks

If you use your car for your work or business, you may want to talk to an insurance agent to see if you need obtain a commercial vehicle policy and get a commercial vehicle insurance quote.

How Does Commercial Vehicle Insurance Work?

Depending on your business practices and needs, commercial car insurance policies can be made for a fleet of vehicles or just a single car. It is a fairly adaptable plan depending on whether you are an independent plumber that just needs a single commercial van insurance plan for the company van or have a giant garage full of semi-trucks that need coverage.

In the event that any of the covered vehicles gets into accident, get damaged due to weather, or are involved in other incidents, you can file a claim to get compensation for the cost of repair or replacement. If you or one of your employed drivers causes bodily injury to a person or damages their property and is at fault, that person can file a claim with your insurance company. Your policy should cover the costs of the claim, until it reaches your policy’s limit. Depending on your policy, some insurance for commercial vehicles can help protect your business assets if you are being taken to court in a lawsuit.

Does Commercial Vehicle Insurance Cover Personal Use?

It depends. Personal use is usually covered for company owned vehicles under most commercial auto insurance plans. However, if you are driving your own vehicle to and from work without using it for commercial purposes, then it would only be covered by your personal auto insurance policy.

If you are only using your personal vehicle for business purposes on occasion, you will either need sufficient liability coverage on your personal policy or purchase a separate commercial auto insurance policy. If your personal vehicle is listed as commercial vehicle but other members of your family use it for personal purposes, you might have to get a “non-owned vehicle endorsement” for them to be covered.

In other words, it all depends on your situation. Your best bet to talk with your insurance agent to explain your vehicle, its use, and all the other outside factors to determine what is your best action to be fully covered in all of your circumstances.

Get a FREE commercial auto insurance quote online through Freeway Insurance! Find a commercial auto insurance policy that covers your needs at an affordable price.