What is Commercial Auto Insurance?
Commercial auto insurance is a specialized business policy designed to cover vehicles used in the course of conducting business. Whether your company operates a single company car or an entire fleet of delivery trucks, this coverage provides the liability and physical damage protection that personal auto policies simply aren't designed to offer.
Vehicles Typically Covered
- Company cars and business-use automobiles
- Box trucks and cargo vans
- Food trucks and mobile service vehicles
- Work vans and service utility trucks
- Commercial trucks and heavy-duty vehicles
- Fleet vehicles of any size
This type of coverage is sometimes referred to as commercial vehicle insurance, truck insurance, fleet insurance, or commercial car insurance - they all refer to the same category of business-use protection.
Why Personal Auto Insurance Isn't Enough
Many business owners assume their personal auto policy will cover them when driving for work. In most cases, that assumption is incorrect - and the gap in coverage can be costly.
Personal Policies Exclude Business Use
Personal auto insurance is written and rated for private, non-commercial use. Most policies specifically exclude vehicles operated for business purposes, meaning a claim that occurs during a business errand could be denied entirely.
Different Coverage Needs
Businesses often require higher liability limits, coverage for multiple drivers, and protections that don't exist in personal policies - such as hired auto coverage, employee use endorsements, and commercial-grade roadside assistance.
Vehicle Type Matters
Certain commercial vehicles - such as box trucks, service vans, or vehicles modified for work - may be ineligible for personal auto coverage altogether, regardless of how they're used.
Contract and Legal Requirements
Many client contracts, job bids, and industry regulations require businesses to carry commercial auto insurance with specific minimum liability limits. A personal policy cannot satisfy these requirements.
If vehicles are used to transport goods, carry tools, deliver services, or transport clients - a commercial auto policy isn't optional, it's essential.
What Does Commercial Auto Insurance Cover?
A commercial auto policy shares some similarities with personal auto coverage but is structured to address the unique exposures businesses face. Here are the core coverages included in a standard commercial vehicle policy.
Bodily Injury Liability
Covers costs associated with injuries or death you cause to others in an at-fault accident. In most cases, it also provides legal defense if you're sued as a result of the incident.
Property Damage Liability
Pays for damage your vehicle causes to another person's property - including other vehicles, structures, or objects - and typically includes legal defense coverage.
Combined Single Limit (CSL)
Rather than maintaining separate limits for bodily injury and property damage, a CSL policy applies a single dollar amount per covered occurrence - offering more flexibility when claims involve multiple parties or loss types.
Medical Payments / Personal Injury Protection
Covers medical expenses for the driver and passengers in your vehicle following a covered accident, regardless of which party was at fault.
Uninsured / Underinsured Motorist Coverage
Steps in to cover your injuries and, in some cases, vehicle damage when the at-fault driver has no insurance or insufficient coverage to pay for the losses they caused.
Comprehensive Physical Damage
Covers damage to your commercial vehicle from non-collision events such as theft, vandalism, fire, flooding, and other covered perils.
Collision Coverage
Pays for repairs to your vehicle when it collides with another vehicle or object, regardless of fault.
Additional Coverage Options
Beyond core coverages, a commercial auto policy can be expanded with optional endorsements to address the specific operational needs of your business.
Emergency Roadside Assistance
Around-the-clock roadside support for your commercial vehicles - including towing, flat tire service, jump-starts, fuel delivery, and lockout assistance.
New Vehicle Replacement Cost
If a recently purchased commercial vehicle is totaled in a covered accident, this coverage replaces it at current market value rather than depreciated actual cash value.
Hired Auto Physical Damage
Protects your business when a rented or borrowed vehicle used for business purposes is damaged or becomes inoperable - including loss-of-use costs.
Employee Hired Auto Coverage
Extends protection to employees who rent or borrow vehicles in their own name for work purposes, ensuring your business isn't exposed when staff use non-owned vehicles.
Rental Reimbursement
Covers the cost of a replacement rental vehicle while your commercial vehicle is being repaired following a covered incident - minimizing disruption to your operations.
Expanded Towing
Provides towing to the repair facility of your choice regardless of location, giving you greater control over where your commercial vehicles are serviced.
Auto Loan / Lease Gap Coverage
If your commercial vehicle is totaled or stolen, this coverage addresses the difference between your outstanding loan or lease balance and the vehicle's actual cash value.
Blanket Additional Insured
Simplifies the process of adding additional insureds - such as clients or contractors - to your policy, with efficient proof-of-coverage documentation.
Who and What is Covered?
Covered Drivers
Your commercial auto policy can extend coverage to employees, family members, and other authorized drivers operating your business vehicles.
If an unlisted driver is involved in an accident while operating a covered commercial vehicle, coverage may be reduced to your state's minimum financial responsibility limits. It's important to keep your driver list current.
Trailer Coverage
Whether a trailer is automatically covered depends on its weight and the specific policy issued.
Under 3,000 lbs (gross vehicle weight)
Automatically covered for liability purposes. However, if physical damage coverage (theft or damage) is needed, the trailer must be specifically listed on the policy regardless of weight.
Over 3,000 lbs (gross vehicle weight)
Not automatically covered. Trailers in this weight class must be explicitly listed on your commercial auto policy for any coverage to apply.
Weight thresholds may vary depending on the specific policy issued. Always review your policy documents carefully.
Unattached Tools and Materials
Loose tools, equipment, and materials transported in a commercial vehicle are not covered under a commercial auto policy. For protection of these items, a Business Owners Policy (BOP) or general liability policy is the appropriate solution.
Frequently Asked Questions
Ready to protect your fleet?
KEEP YOUR BUSINESS MOVING - WITH COMMERCIAL AUTO COVERAGE YOU CAN COUNT ON.
The Fortis Insurance offers commercial auto policies built for the real demands of business operations. From single vehicles to full fleets, we'll help you build coverage that meets your needs, satisfies contract requirements, and protects your bottom line.
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