Last Updated: September 12, 2022

The Best Commercial Vehicle
Insurance Guide for Your Business

TLTR: This article will provide you with information on commercial vehicle insurance and why it’s necessary for your business, along with its importance. It also explains how this type of coverage can benefit your small business interests. 

Do you have a commercial vehicle? If so, then it’s crucial to understand the importance of the insurance coverage your company needs in order to protect itself.  

As with any automobile, your business vehicle can get into accidents or suddenly malfunction while on the road. According to the FMCSA, 166,250 vehicles were involved in traffic accidents along with over 4,500 fatalities in 2020. In the same year, over 75,000 road-related injuries were reported. 

Those numbers should give you pause if you or your business vehicles aren’t properly insured.  

In this blog

What is Commercial Vehicle Insurance? 

Commercial vehicle insurance is a type of car insurance that provides protection for vehicles used specifically for business. It can be tricky to navigate the process when deciding exactly what coverage you need, but it’s worth the effort in order to avoid potential hefty financial burdens.  

 This insurance covers vehicles such as cars, buses, trucks, and vans involved in accidents, theft, vandalism or natural disasters.  

You might use a van to deliver items from your auto-parts store to garage mechanics every day. Even if you have a personal auto policy, it might not cover you for damages if your van has an accident in the course of making a delivery. In this case, a commercial vehicle policy will keep you covered. 

NOTE: Commercial vehicle policy is strictly only for business-owned vehicles. It does not cover personal vehicles. 


Coverages Included in Commercial Vehicle Insurance

There are many factors that go into determining the right amount and type of coverage for your business, including whether or not you use the vehicle for personal use, how many miles per year it’s driven, whether there are any passengers onboard when used for work purposes, and more. As per the Bureau of Labor Statistics, 40% of all work-related accidents occur on a roadway. These stat underlines how vital reliable insurance coverage is for business vehicles to cover losses due to road incidents. 

But that’s just one aspect of what commercial vehicle insurance covers. Let’s take a look at some of the others: 

Auto accident liability coverage

This coverage provides financial backup against legal costs if you’re sued by someone who was involved in an accident caused by you or your employee in your business vehicle. It also helps to pay for repairs to the other party’s car or their medical expenses. 

For example, an employee hits another car while parking the company van while on a delivery run. The employee is at fault in this situation. If you have commercial vehicle insurance, it can cover the cost of repairs to the third party’s car. The policy will also cover any injuries in such cases. 

Medical payments coverage

If your insurance includes medical payment coverage, it will cover the cost of your and any passenger’s medical expenses due to an accident involving the company vehicle. This coverage is applicable regardless of which party caused the accident. 

Or let’s say you have a lawn-care business and an employee is driving the company van to a client’s residence. While on the way, the employee loses control on a wet road, runs the van into a telephone poll, and is brought to the hospital in an ambulance to treat his injuries. Your company’s commercial auto insurance will pay for the ambulance ride and the treatment. 

    Comprehensive coverage

    This will cover your car from damage that is not caused by a collision. Instances where this policy comes into play are: 

    • Theft 
    • Vandalism 
    • Weather damage 

    You’re driving your company vehicle in a thunderstorm. Suddenly, a tree is hit by lightning which causes a large branch to fall on your car. The windshield is shattered and the hood is badly dented. In this case, the coverage will pay for necessary repairs and replacement of parts for the car. 

    Collision coverage

    As its name suggests, this coverage pays for the repair costs for damage to your car from an accident. In addition, the policy will also cover the costs when you hit inanimate objects such as fences, lamp posts, fire hydrants, etc. 

    Uninsured & underinsured motorists’ coverage

    This covers you for cases in which your company car is involved in an accident with another driver who is not insured or doesn’t have enough insurance. According to the ASPE, almost 30 million Americans are uninsured as of 2020.  

    Having this policy ensures that you don’t have to pay for the medical expenses if you injure an uninsured or underinsured person in an accident. 

    What It Doesn’t Cover?

    Despite the range of coverage offered by commercial vehicle insurance, there are certain things it won’t help you with. They are:

    Personal vehicles

    As its name suggests, commercial car insurance is strictly for commercially owned vehicles. In cases where an employee uses their personal vehicle for business purposes, you would have to make certain adjustments to your commercial vehicle coverage or get a separate policy stating that your personal car or an employee’s car will be utilized for business purposes. 

    Rented vehicles

    Your commercial vehicle insurance will not cover any rented or leased vehicles that you might use for your business. If there’s an accident with a rented vehicle your company can be held accountable. In such cases, non-owned auto insurance can be applicable. This policy will also be viable for the above-mentioned instances in which your business temporarily utilizes an employee’s vehicle for business purposes.


    If you or your employee utilizes the companyowned vehicle for ridesharing purposes with apps such as Uber or Lyft, commercial vehicle insurance will not provide coverage for it.  

    Onboard Items

    The coverage will not pay for any damage or loss to items that you or your passengers are carrying. If you are travelling in a companyowned car with either personal belongings or business assets, you can insure them separately with either personal articles floater insurance or commercial property insurance. 

    Illegal use of vehicle

    Commercial vehicle insurance will not provide any cover if you or your employees use company vehicles for illegal purposes.

    Intentional damage and misuse

    If you or employees intentionally damage the company owned vehicle or use it to cause physical injuries or cause property damage on purpose, then this policy will not cover for any loss. For example, if you are found guilty of recklessly driving your business vehicle and intentionally colliding into other vehicles, you will be denied coverage.


    How Much Does Commercial Vehicle Insurance Cost?

    Just as with any other insurance policy, commercial vehicle insurance rates are based on a number of factors, including: 

    • The type of vehicle owned by the business 
    • Number of vehicles owned 
    • Frequency of vehicle use 
    • Driving records of you and your employees 
    • Credit score 
    • Claims history 
    • Mentioned policy limits 
    • Industry specific risks  
    • Choice of coverage 

    According to Insureon, the average cost of commercial automobile insurance is around $142 per month, or $1,704 per year for a policy limit of $1 million. And a majority of small businesses pay less than $1,500 per year for their auto coverage. 

    Now let’s look at some of the best commercial vehicle insurance providers: 

    Carrier Relevance Features
    The Hartford Applicable for 5 or more vehicle owners

    -Special rates for fleet owners

    -Coverage in all 50 states

    Progressive Best overall option

    -Availability of various discounts

    -Wide range of coverage options

    State Farm Financially strong carrier -Top notch customer service -Limited policy options

    NOTE: If your business has smaller vehicles, your insurance rates will be lower compared to larger trucks. 


    How Applicable is Commercial Vehicle Insurance for Small Businesses?

    Commercial vehicle insurance is something to consider if you run a small business that owns a commercial vehicle. Not all commercial vehicles are the same, so commercial auto insurance quotes will vary from company to company, depending on what you need.  

    There are three main types of commercial auto insurance…

    Commercial fleet insurance

    A commercial fleet policy is for businesses with multiple commercial vehicles. In most cases, you’ll be able to save money if you get commercial auto insurance through a commercial fleet provider as opposed to individual commercial vehicle insurance.  

    Commercial auto liability insurance

    Commercial auto liability insurance provides protection for your commercial vehicles against bodily injury and property damage to other parties, usually with a $1 million limit per commercial vehicle. You’ll most likely require commercial vehicle insurance if you own trucks and operate them in a commercial capacity. 

    Commercial automobile insurance

    Commercial automobile insurance is similar to individual commercial vehicle policies that you can buy through an auto insurer. This kind of commercial vehicle policy covers only the vehicle in question. If you have commercial fleet coverage, this type of policy will not work for commercial property damage liability. But if you only have commercial vehicle insurance, you can purchase additional commercial automobile insurance to protect your vehicles against bodily injury and property damage. 

    If your business frequently utilizes commercial vehicles for its operations, then it’s vulnerable to outside risk while on the move. Depending on the nature of your small business and how you operate, having commercial vehicle insurance to protect you in times of peril is essential. 

    This policy is crucial to your business if you’re looking to protect your valuable assets from financial ruin.

    In Conclusion,

    Commercial vehicle insurance is an essential policy to have if you need to shield your business vehicles from unforeseen traffic mishaps. It’s also important for you, as a business owner, to know your unique risks and have the right coverage options. In doing so, you are protecting yourself and your business from any unforeseen misfortune that could lead to financial catastrophe. 

    Consult with an insurance expert before you purchase your vehicle insurance policy. 

    Did you find this blog useful? Reach out to our experienced insurance agents at any time. Find an agent today! 

    Frequently Asked Questions (FAQs)

    Do I need commercial vehicle insurance?

    If you own a business with vehicles used only for commercial purposes, then commercial vehicle insurance is very important to have. All states except New Hampshire and Virginia require auto insurance coverage for business-owned vehicles. 

    Even if you operate in a state that doesn’t require you to have this vehicle insurance, purchasing it is still a sound decision. It will help you avoid burning through your bank account if you have to pay for repair expenses or medical bills. 

    What is the difference between commercial vehicle insurance and commercial automobile insurance?

    The major difference is that commercial automobile policies are written on an individual basis by insurers. While commercial vehicle insurance policies are commercial fleet policies which are suitable for a business with multiple business vehicles.

    What do I need in order to get a commercial vehicle insurance quote?

    In order to get a commercial vehicle insurance quote, you’ll need the following: 

    • Business name 
    • Business description (sole proprietorship, LLC) 
    • Vehicle details including model and vehicle identification number 
    • Commercial auto classification  
    • Employee driver information 
    • The vehicle’s mileage 
    • Details regarding vehicle’s operation

    Multiple Coverage Options at Your Fingertips

    Choose from various options and select the policy that best suits your requirements.