Commercial Auto Insurance is the best way to protect the vehicles that you use for work. But what types of cars do you need to insure under this policy? In general, it covers both commercial automobiles and business automobiles. In this article explaining Commercial Auto Insurance, we’ll walk through the difference between the two.
What is the difference between Commercial Auto and Business Auto?
There’s a fine line between ‘Commercial Auto’ and ‘Business Auto.’ Some people use these terms interchangeably, but there’s a difference in the type and use of these categories of vehicles. Let’s break them down.
Commercial Auto
Commercial Autos are vehicles registered in the company’s name (or to the business owner) and are operated by the insured and their employees as part of the company operations. These are automobiles used for work purposes such as transport and delivery of materials and people. Examples include delivery vans, ten-wheeler trucks, and client transportation vehicles.
Business Auto
Business Autos are vehicles that are also owned by the insured but are used as part of their employment, like regular cars used to drive to various locations to meet with clients. Company cars are examples of vehicles in the Business Auto category.
When do I need Commercial Auto Insurance?
Whether you have Commercial Autos or Business Autos, it’s mandatory for businesses that use cars for business purposes to have Commercial Auto Insurance. It’s there to protect your business, including its property and staff, from incurring large financial damages in the event of vehicular accidents where one of your registered automobiles is involved, whether or not you’re at fault.
The criteria for having Commercial Auto Insurance lies in the type, use, and ownership of the vehicles. If the automobiles are large and heavy trucks, they’re likely to require coverage. The same may be true for some smaller vehicles, such as company cars and even recreational vehicles, if they’re also used for everyday work. Automobiles that are also registered under a business must be part of a Commercial Auto Insurance plan.
Do I need Commercial Auto Insurance if I already have Personal Auto Insurance?
When it comes to Commercial Auto Insurance versus Personal Auto Insurance, it can get confusing. They work the same way, which prompts people to wonder why they’d need both.
Commercial Auto Insurance is designed for cars used for business purposes, while Personal Auto Insurance is meant for automobiles used for personal reasons. The latter often doesn’t encompass the vehicles covered by the former, hence the need for separate policies.
Choosing the right Commercial Auto Insurance
Now that you know you need Commercial Auto Insurance, the next step is choosing the right policy and provider to adequately fit your company’s needs. Here are some tips to help you pick the best one:
Check the inclusions
Most Commercial Auto Insurance policies will include the following mandatory coverage:
- Third-Party Liability: Protects your business if it or one of its representatives (i.e., staff) is at fault for an accident.
- Accident Benefits*: Covers medical and rehabilitation bills of those injured in an event involving one of your insured vehicles, regardless of fault.
That said, depending on your company’s needs, you may want to extend it with additional coverages such as increased Third-Party Liability, Direct Compensation-Property Damage, Collision/Upset coverage, All Perils or Comprehensive coverage.
Vet the provider
You’ll want to partner with an insurance provider that has a good track record of customer satisfaction. One that you can trust will be there whenever you want to file a claim or need their assistance in case of an incident.
Talk to the experts
If you’re new to the world of Commercial Auto Insurance (or insurance, in general), don’t hesitate to reach out to the experts (brokers) and ask the necessary questions to find the most appropriate plan and provider for your company.
Commercial Auto Insurance for Commercial Auto and Business Auto
If you’re a company owner who operates vehicles for business purposes, whether your cars are categorized under Commercial Auto or Business Auto, you’re going to need Commercial Auto Insurance to protect your operations. Find the best Commercial Auto Insurance to cover your work vehicles today!
*Does not apply in Quebec