If you don’t operate a fleet of business vehicles — or run a business at all — you may never have given commercial auto insurance a thought. But you might need to be covered by a commercial policy in addition to a personal policy, particularly if you use your own vehicle for work purposes other than commuting.
If you’re self-employed or a small-business owner using your car for work, you’re on the hook for commercial coverage. However, if you’re regularly using your car for an employer, it’s their responsibility to insure it for work-related driving, whether or not they own the vehicle.
Here’s how to know when a commercial auto policy makes more sense than just getting personal car insurance quotes.
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What is commercial auto insurance?
Commercial car insurance covers vehicles used for business purposes, whether by you or an employee. Any accident-related expenses that arise from injuries, deaths or property damage are covered up to the policy limits.
Commercial auto insurance is sometimes confused with rideshare insurance, which is typically required if you’re a rideshare or delivery driver.
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A commercial auto insurance policy typically includes:
Liability coverage, including bodily injury and property damage liability, to pay for injuries, deaths or property damage if a driver causes an accident while working. This coverage may also pay legal fees.
Medical payments, no-fault or personal injury protection, to pay for the medical expenses of the driver and any passengers in an accident, regardless of fault.
Uninsured motorist coverage to pay for injuries and sometimes property damage caused by an uninsured or hit-and-run driver. This coverage may also include underinsured motorist coverage if the at-fault driver doesn’t have enough car insurance coverage to cover all expenses.
Comprehensive and collision coverage to pay for vehicle damage from theft, vandalism, flood, fire and damage if a work vehicle is hit by an object or another car.
Commercial policies could include other coverage, like towing and labor, rental reimbursement and lease gap coverage, but they generally don’t cover tools or other items you’re carrying in the vehicle. A business owner’s policy is needed to cover tools owned by the company, while a home or renters insurance policy covers personal belongings in the vehicle.
» MORE: What does car insurance cover?
Who needs commercial auto insurance?
If you’re using your car only for occasional business use, your personal policy may offer enough coverage. But if you regularly use your car for work, with the exception of commuting, you’ll need a commercial policy — including if you’re self-employed or a small-business owner.
You’ll likely need a commercial policy if you:
Drive for cash. Driving friends to a concert or grabbing food for a co-worker is covered by a personal policy, but not transporting people or goods for money.
Log high mileage for work, such as regular visits to store locations or job sites.
Transport items for work purposes, like heavy tools or equipment.
Check out the scenarios below to see when you may need a commercial policy and when a personal policy is sufficient.
Personal auto insurance
Commercial auto insurance
Grabbing morning doughnuts for co-workers.
Delivering pizzas to paying customers.
Driving friends to a concert.
Driving clients to a work event.
Taking weekend road trips.
Driving to multiple job sites a day.
Commuting to the construction site where you're working.
Hauling tools and equipment to the construction site where you're working.
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