Commercial Auto
If a vehicle is used in your business, your personal auto policy will not cover a business-use accident. Commercial auto is the policy that does. It applies to owned vehicles, rented vehicles, and employee-owned cars used on business.
What it is.
Commercial auto sits in roughly the same shape as personal auto: liability, physical damage, uninsured motorist, medical payments. The difference is in the rating, the limits, and the way the policy treats the relationship between vehicles, drivers, and the business that owns or uses them.
We write commercial auto for service vans, contractor trucks, sales fleets, food delivery, executive transport, and small trucking operations. Larger commercial fleets and any vehicle with a DOT number have additional regulatory layers (FMCSA, MCS-90 endorsement, driver hour rules) that we coordinate with specialty markets.
Below is what each piece of a commercial auto policy actually does, where the gap with personal auto bites employees, and how the underwriter thinks about your business when pricing the policy.
Any business with vehicles titled to the business, any business that rents vehicles for company use, and any business where employees drive personal vehicles for work tasks (deliveries, client visits, runs to the supply store).
What it covers.
Each policy is a stack of named coverages. Required parts are mandated by state law. Recommended parts are what we put on most policies. Optional parts depend on your situation.
Bodily Injury Liability
Pays the other party's medical bills and legal claims if you cause an accident. Standard small-business limits are $1M combined single limit. We rarely recommend less than $500,000 for any business with employees behind the wheel.
Property Damage Liability
Pays for the other vehicle, fence, building, or property if you cause an accident. Usually included in the $1M combined single limit.
Combined Single Limit (CSL)
Many commercial auto policies use one combined limit (e.g., $1M CSL) instead of split BI/PD limits. Cleaner for the business, simpler for the carrier. Recommended for most operations.
Uninsured / Underinsured Motorist
Pays YOUR business and YOUR injured employees when an at-fault driver has insufficient coverage. State rules vary on whether this can be rejected. Generally not worth dropping.
Physical Damage (Comp + Collision)
Damage to YOUR business vehicles from collision (you hit something) and comprehensive (theft, vandalism, weather, animal strikes). Usually written with $500 or $1,000 deductibles. Required by lenders on financed vehicles.
Medical Payments / PIP
Covers medical expenses for your drivers and passengers regardless of fault. Limits typically $5,000 to $10,000 per person.
Hired Auto Liability
Covers liability when an employee rents a vehicle on company business. Different from non-owned auto. Both are usually included on a commercial auto policy and are NOT both included on personal auto.
Non-Owned Auto Liability
Covers liability arising from employees using their personal vehicles for company tasks. Critical for any business where employees drive their own cars to client sites, training, or supply runs.
Rental Reimbursement
Pays for a substitute vehicle while yours is being repaired after a covered loss. Important for businesses where downtime equals lost revenue (delivery, mobile service).
Hired Auto Physical Damage
Covers damage to vehicles you rent (separate from hired auto liability). Useful if employees regularly rent for work travel. Often cheaper than declining the rental car company's daily insurance.
When it kicks in.
Real situations we see in the agency. The point is to show how each layer of coverage maps to actual life, not to scare you.
Service van rear-ends a car at a stoplight
Your driver was at fault. Bodily Injury Liability and Property Damage Liability pay the other party's medical bills and vehicle repair. Collision pays the damage to YOUR van minus deductible. Lost revenue while the van is in the shop is not covered unless you have business interruption tied to the vehicle.
Employee uses personal car for client lunch run
Employee causes a fender-bender. Their personal auto policy may exclude business use entirely. Non-Owned Auto Liability under your commercial policy picks up the third-party claim. Without it, the claim could fall on the business.
Pickup truck stolen overnight from job site
Comprehensive coverage pays the actual cash value of the truck minus deductible. Tools and equipment inside the truck are typically NOT covered by auto: those go through inland marine or BPP.
Contractor fleet, deer strike on Route 9
Animal strike is comprehensive (not collision). Lower deductible usually applies. Pays vehicle repair minus the comp deductible.
Sales rep rents a car at airport, scratches it
Hired Auto Physical Damage pays for the rental car damage minus deductible. Often a cheaper way to cover rentals than buying the daily collision damage waiver from the rental company every trip.
Key terms.
Plain-English definitions. The vocabulary insurance carriers assume you already know.
- 01Combined Single Limit (CSL)
- One limit that applies to both bodily injury and property damage in a single accident. Cleaner than split limits.
- 02Hired Auto
- Vehicles you rent, lease, or borrow for business use. Coverage applies while in your possession.
- 03Non-Owned Auto
- Vehicles owned by employees, used for business tasks. Coverage protects the BUSINESS from liability arising from that use.
- 04Symbol 1 / Symbol 7
- Industry codes that define which vehicles are covered. Symbol 1 is 'any auto' (broadest). Symbol 7 is specifically described scheduled vehicles. Make sure your policy is broad enough for your actual operations.
- 05Radius of Operation
- How far from the home garage your vehicles operate. Affects rating. Usually quoted at 50 mi, 200 mi, or over 200 mi. Trucking has its own classifications.
- 06MCS-90 Endorsement
- Federal endorsement required for interstate trucking. Provides public liability protection for cargo and operations. Don't ignore if you cross state lines with freight.
Common questions.
Questions clients ask before they get on the phone with AJ. If yours isn’t here, just call.
Almost never. Personal auto policies usually exclude or limit business use. If you carry a single delivery a week or use the vehicle to drive between client sites, your personal carrier could deny the claim. Commercial auto is the right tool.
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