If you own a small business that uses vehicles for work purposes, you may have heard about commercial auto insurance. But what is commercial auto insurance?
This type of insurance typically describes a policy that can help pay for certain damages you cause while driving work-related vehicles. Depending on your policy, it may also cover damage to your own vehicle after an accident, theft, or vandalism.
If you’re interested in getting coverage for your work-related vehicle, this guide will help you understand different coverage options and what you may want on your commercial policy.
If you drive your own vehicle, you may already have personal auto insurance. But what’s the difference between commercial and personal?
To put it simply, the difference between these insurance policies is generally how your vehicle is used. Personal auto insurance can typically help cover everyday activities like commuting to a single workplace or running errands. Commercial auto insurance is for business-related driving, like driving between worksites or making deliveries for your operations.
When business use enters the insurance picture, the risk level may change. Work vehicles often carry expensive tools or log more miles, which means carriers may assess commercial auto risk differently. This is why commercial auto coverage may have higher costs and liability coverage limits compared to personal auto coverage.
A quick note: if a vehicle is used for business but insured under a personal policy, your insurance claims after an accident can be denied.
A range of small businesses may rely on vehicles for different purposes. Here are some of the most common scenarios where commercial auto insurance can come into play:
Visiting clients or multiple job sites (contractors, consultants, or service pros)
Making deliveries or transporting goods (retailers, food businesses, or couriers)
Hauling tools or equipment (landscapers, electricians, or plumbers)
Light fleet operations (a few company-owned vehicles used regularly)
You may need it if:
You or your employees drive regularly for work-related tasks
You transport goods, tools, or equipment for your operations
You visit multiple work locations in a day
Your clients or contracts require proof of coverage
You might not need it if:
You use your vehicle to commute to work
Your driving is mostly personal with very limited work use
Some insurers handle occasional business use differently, so check with an agent about your operations.
To understand how this coverage works, it may be helpful to break down a few key points about insurance:
If an accident occurs, you typically want to file a claim with your insurance company as soon as possible, just like you would with personal auto insurance. Your insurer may then assign a claims adjuster to your case to review your coverage and help determine liability as well as the cost of damages, injuries, and legal services.
A commercial auto insurance policy can vary for different business owners, but here are some coverages that you may need on your policy:
No two businesses are alike, so talk to an agent who can help you understand what coverage you may need for your operations and industry.
Commercial general liability:
Commercial general liability insurance helps protect businesses such as yours against financial loss from claims involving bodily injury, property damage, medical payments, and personal and advertising injury, including claims for libel and slander. It can also help pay legal defense costs, settlements, and judgments for covered claims.
Hired and non-owned auto (HNOA):
HNOA coverage can help cover third-party damages or bodily injuries you cause someone else while driving work vehicles that your business rents, leases, or borrows. This coverage may help you navigate a common gap that business owners may not realize exists until after an accident.
Cargo:
Cargo coverage helps protect the items or goods that your business transports for someone else if they are damaged, lost, or stolen during transit.
Here are a few things commercial auto insurance typically won’t cover:
Tools or equipment inside the vehicle if they’re damaged or stolen
Employee injuries on a worksite because this is typically covered by worker’s compensation
Certain third-party delivery or rideshare uses, depending on the policy
Rather than thinking of these as exclusions, it can be helpful to discuss these coverage questions with your insurer. Certain coverage gaps may be addressed with endorsements or additional coverage.
The benefits of commercial auto insurance for small businesses can go beyond just meeting legal requirements. Here are some ways that this insurance may benefit you:
Having the right coverage in place may help you navigate certain accidents, so you can focus on running your business how you want to.
If you have been wondering how to get commercial auto insurance, the process can feel more manageable when you break it into a few clear steps:
From there, you can get a commercial auto insurance estimate and connect with an agent who can help you tailor a policy to your needs.
Can I use personal auto insurance for business driving?
Typically, you’ll need commercial auto insurance to help meet legal requirements for driving business vehicles.
Does commercial auto cover personal use?
This depends on your policy. It can be helpful to confirm your insurance specifics with your insurer.
Do I need commercial auto insurance if employees drive their own cars?
You might. Hired and non-owned auto coverage (HNOA) can help cover certain vehicles that you use for work-related purposes that your business doesn’t own.
How many vehicles count as a fleet?
There’s no strict rule, but even a few vehicles (between two or five) may be considered a small fleet by certain insurers.
What info do I need for an estimate?
Basic details about your vehicles, drivers, and business operations are usually enough to start your commercial auto estimate.
Ready to find commercial auto insurance for your small business? Kemper has commercial coverage and available discounts that may benefit you. Enter your ZIP code to begin a quick estimate online or see if an agent is near you to discuss your insurance options!