How to Determine If You Need Commercial Auto Insurance


Your personal auto policy may not cover you for business

You’re a business owner and have taken the time to cover your company in the event of unforeseen circumstances that may cause damage to your building, your inventory and your employees. But now you’re wondering if you need a separate policy that covers your company vehicle. Many self-employed workers, small business owners and start-ups are faced with the question of whether or not they need commercial auto insurance. After all, if you work for yourself, wouldn’t your personal auto policy cover you if you had an accident or some other event? Determining whether or not you need a commercial policy is not always easy. Here’s a guide to what factors you need to look at and how to make that decision.


1. Why are you driving?
The first factor to consider when deciding if you need a commercial auto policy is why you’re driving the vehicle. Your personal policy won’t cover you if you are:
  • Delivering goods or people and charging a fee
  • You’re conducting a service in your vehicle
  • You are carrying tools, equipment or towing a trailer that is used for business

2. Who’s driving?

Usually, a commercial policy is needed if both you and your employees drive the vehicle for business purposes. The policy will allow you to list those who are drivers so that they are covered in the event of an accident.

3. What are you driving?

Another important distinction can be made when it comes to the type of vehicle you’re driving. If you’re using any of the following vehicles, a commercial policy is highly recommended:

  • • Vehicles that have work equipment onboard or are outfitted with equipment
  • • Dump Trucks
  • • Refrigerated trucks
  • • Bucket and Catering Trucks
  • • Utility vans
  • • Limos, Taxis
  • • Flatbeds
  • • Rented Vehicles
  • • Leased Vehicles
  • • Vehicles that are leased by the business

4. Who owns the vehicle or who’s it registered to?

A very important thing to consider is who the vehicle is registered to. If it’s under your company’s name, a commercial policy is definitely needed. Even if the vehicle is in your name, as the owner of the company you need to consider how much time you’re spending using your vehicle for business. If the vehicle is being used mostly for business purposes, it won’t matter whose name it is registered to, you’ll still want to cover yourself with a commercial policy.


There are some exceptions where your personal policy will cover you even when you are using your personal vehicle for business. It depends on the type of business you’re conducting. For example, it’s okay if you’re selling Avon or Mary Kay products part time, or if you’re a real estate agent transporting clients in your car to showings, and other similar instances. It is best to check with your insurance provider to be sure.
Whatever business you are in, review these facts to help you determine if you need a commercial auto policy. If you are not sure, please give us a call and we can answer your questions, clarify the requirements and guide you on the right policy for your needs.