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What You Need to Know About Commercial Vehicle Insurance

Business owners not only seek to maximize their profits from a commercial activity, but also to minimize risks and losses. Most businesses own at least one vehicle, if not an entire fleet, for day-to-day activities of the work. It could be something as simple as a company car for commuters, or pickup trucks for a grocery delivery service.

When vehicles are involved, there is a new element of risk introduced in business operations. To mitigate this risk for business owners, commercial vehicle insurance becomes an essential requirement.

Commercial Vehicle Insurance Discounts

Commercial auto insurance can be a significant cost to the company. The good news is that you can offset some of it by using discounts which are available to different establishments and situations.

If you opt for a business owner’s discount from your commercial vehicle insurance company, you might be eligible for a bundling discount on buying both vehicle and owner’s insurance together from the same company.

If you pay for your entire policy upfront instead of paying intermittent premiums, your insurers might offer you a “paid-in-full” discount. This is profitable for you as well as the insurance company, as it saves on the cost of following up and issuing you regular bills over a long period of time. You save on the main cost, as well as the additional opportunity cost of arranging to pay the premium regularly.

Some vehicles require the driver to have a commercial driver’s license (CDL) by law. Often, commercial auto insurance companies might offer a CDL discount of up to 20% for drivers who hold a valid CDL license.

When vehicles are involved, there is a new element of risk introduced in business operations. To mitigate this risk for business owners, commercial vehicle insurance becomes an essential requirement.

Why You Need Auto Insurance for Your Business

If a company vehicle is involved in any kind of an accident during business hours, or is stolen or vandalized, the owner cannot recover those losses using their personal insurance. This is where commercial auto insurance comes in.

Secondly, a vehicle involved in an accident might lead to heavy collateral damage, such as injury to co-passengers, damage to public property, even lawsuits – all of which can be a very hefty expense for the owner to bear. Not only that, but some states might even have a minimum liability insurance requirement for commercial vehicles. If your business has a vehicle and you are using personal insurance to cover it, you might very well be breaking the law.

It is therefore advisable that business owners who use vehicles – be it for delivery, travel, transport of goods or any other purpose – should get their vehicles duly insured.

Commercial Auto Insurance FAQs

What Does Commercial Vehicle Insurance Cover?

While policies vary according to the type of vehicle, activity and federal laws of that state regarding commercial auto insurance, some losses are covered by most insurance providers.


Liability refers to the expenses that are raked up when you or your employee causes an accident. These include medical expenses, loss to property and legal fees that the other involved party might incur.

Medical Expenses

Commercial vehicle insurance covers any medical expenses that you might incur for treating injuries sustained by you or your employee, as well as any co-passengers in the vehicle at the time of the accident.

Coverage – Collision and Comprehensive

Collision coverage covers your vehicle when an impact caused by another object or vehicle damages it. Comprehensive coverage includes the non-accidental risks to your vehicle such as theft, intentional damage or damage due to weather.

Uninsured/Underinsured Motorist

In the event that the accident you or your driver have met with was caused by a motorist with insufficient or no insurance coverage, the damages are paid for as part of your insurance policy.

What Does a Commercial Auto Policy Cover?

The coverage of an auto policy may be different based on the insurance policy and the provider you have chosen. However, in general, you can find elements that protect your commercial vehicle from many issues. In most cases, a commercial auto policy will cover four sections.

First, we have Liability, representing the costs that happen whenever your employee gets into an accident. These could be due to the damage or loss of resources. In addition to this, the medical expenses of the employee and the co-passengers are also taken care of. More importantly, coverage, collision, and comprehensive packages can protect your vehicle from unforeseen circumstances such as theft and weather-based issues.

Last but not least, commercial auto insurance will offer assistance to an uninsured or underinsured motorist as well.

Almost all vehicles that are used for businesses of any kind are covered by commercial auto insurance. These include cars like sedans and SUVs, pickup trucks, dump trucks, tow trucks, snow plows, car haulers, food trucks and vans. Some insurance companies also cover vehicles used in very small businesses like motorcycles and bikes.

If your business owns even a single car, you are better off covering it using commercial auto insurance.

Typically, commercial auto insurance is a must-have for companies such as taxi-on-demand or ridesharing providers, any kind of delivery services (food/liquor/groceries/medicines), e-commerce firms that have a shipping department, snow plowing services, premium limousine fleets or chauffeur services, packers and movers, vehicles transporting hazardous or flammable materials and freight transportation.

It is also important for independent contractors using their own car for work – such as Uber or Lyft drivers, or small business owners (for instance, on-call beauticians, stylists, event planners or housekeeping professionals) to cover their vehicle using commercial car insurance if it is not already provided by the firm with which you have a contract. It is essential for professionals who are vulnerable to heavy losses if they find themselves in an auto accident, as commercial vehicle insurance gives them protection against these events.

When you go for a commercial vehicle insurance policy, always ensure that you are properly informed about the regulations, provisions and discounts that you can avail as a business owner. Not only does insurance save you money in the short as well as the long term, but also offers you peace of mind that any losses you might incur in the business are compensated for.