Embroker Team May 13, 2024 4 min read

How Much Does Commercial Auto Insurance Cost?

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If travel and transportation are essential to your company’s business model, you may ask yourself, what does commercial auto insurance cost? Insuring your work vehicles is just as essential as insuring any other commercial property that’s crucial to the success of your business.

Commercial auto insurance provides financial protection for your business when accidents involving your work vehicles occur. Having the right auto policy in place helps you cover costs related to injuries and damages that are directly tied to vehicles operated by you or your employees for purposes related to your business.

But what if your company doesn’t own a fleet of cars but hires a third party to make deliveries for you? What if you’re using your personal vehicle for business purposes? Do you still need commercial auto insurance?

Let’s examine these questions in more detail to better understand who needs this type of coverage, why certain businesses should purchase commercial auto, and how much they can expect to pay.

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Does Your Business Need Commercial Auto Insurance?

If you own a restaurant that has its own fleet of delivery vehicles or you run a construction company that has its own work trucks that your employees drive from worksite to worksite, then it’s pretty obvious that you’re going to need commercial auto insurance.

But what if you run a small business from home and use your personal vehicle for business purposes sometimes? Do you still need commercial auto insurance? The answer is almost always “yes.”

If you don’t use your personal vehicle all that often for work, then you can probably risk not buying commercial auto insurance. But if you’re using it regularly to visit clients, pick up supplies, or make deliveries, you should definitely invest in commercial auto insurance.

You need a commercial policy because even if you already have personal auto insurance, your policy will not cover damages or injuries that occurred while you were driving your vehicle for business purposes.

The good news is that if you’re not using your personal vehicle for business reasons often, you won’t have to pay a lot for commercial auto insurance. As is the case with any type of insurance, the higher the level of risk that’s involved, the higher your premium will be.

If your business use consists of driving to a restaurant to meet up with your clients once a month, your insurer is not going to see you as a high-risk client.

What Does Commercial Auto Insurance Cover?

One way in which personal and commercial auto insurance are similar is the fact that both offer a wide range of coverage that protects you and your vehicles, including:

  • Property damage liability: Covering costs that result from damages caused to someone else’s property.
  • Bodily injury liability: Covering costs that result from injuries caused to another person.
  • Personal injury protection: Covering costs that result from personal injuries, regardless of which motorist was at fault.
  • Medical payments: Covering medical expenses of you and your passengers, no matter who was at fault.
  • Collision coverage: Covering costs that result from damages caused to your vehicle.
  • Gap insurance: If you total a vehicle that you are leasing, this coverage can cover the money that’s still owed on it.

How Much Does Commercial Auto Insurance Cost?

Your commercial auto insurance rates will depend on many factors, including the driver (their driving record and experience), the number of drivers you need to cover, the type of vehicles you own (make, model, year, weight, etc.), how and for what purposes the vehicles are being used, the coverage amount, and the level of risk that is determined by your insurer.

Commercial auto insurance cost will be affected most by the liabilities that are associated with your business, the many characteristics of your job and your fleet of vehicles, and above all, how these traits define the level of risk you pose to insurers that want to provide you with coverage.

So, what are some best practices that businesses can employ to ensure that their auto insurance premiums are as reasonable and low as possible?

One of the most obvious ways to keep your premium low is by avoiding claims. Stressing safe driving and hiring skilled drivers will go a long way towards keeping your insurance premiums low. If your company remains claim-free over the years, you might qualify for discounts from insurers, since it’s in their best interest to keep you as a client.

Being diligent and vigilant about reviewing your insurance portfolio is also very important. Make sure that your company information is always up-to-date since every little change can have an effect on your insurance rates. If you have switched from heavy-duty trucks to minivans, for example, make sure that your insurers are aware of these changes before you start talking about renewing your policy.

If your business has a considerable number of vehicles, purchasing a commercial umbrella policy to cover excess liability costs might also be an excellent idea that ends up saving you money in the long run.

For further assistance and information, anyone interested in learning more about commercial auto insurance and discussing business insurance coverage needs and options shouldn’t hesitate to reach out to one of our expert brokers at any time. You can also sign up in under 10 minutes to get your commercial auto insurance quote with Embroker.

To learn more about the right coverage for your business, check out Embroker’s digital insurance platform.

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