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Commercial Auto Liability Insurance: Coverage, Cost, & Best Providers

If you own a small business, you likely know how important insurance coverage is. But have you considered whether you need commercial auto liability insurance? If you routinely use a vehicle (or several vehicles) with your business, you need to invest in proper commercial auto coverage. 

This guide will cover commercial auto liability insurance, typical costs, and how to find providers.

What is commercial auto liability insurance? 

Commercial auto insurance is an automobile insurance policy that pays for costs associated with an accident while operating the car. Most states require that you carry a minimum amount of liability insurance. However, many business owners choose to add more coverages to ensure they are adequately protected from the unforeseen. 

There are several coverages in a commercial auto insurance policy: liability including bodily injury and property damage, medical payments or no-fault or personal injury coverage, uninsured or underinsured coverage, collision coverage, and comprehensive physical damage coverage.

Commercial auto liability insurance is the liability coverage in a commercial auto insurance policy. It is required by law in all 50 states. Each state also has its minimum required limit needed for its liability coverage. It protects you if you are at fault in an accident. It covers the other person’s medical costs and repair costs. It also covers your legal fees if you should get sued due to the accident. 

Is commercial auto liability insurance required? 

Yes, commercial auto liability coverage is legally required in all 50 states. You must have the minimum liability coverage required by each state before driving a car for business purposes. You should check the min requirements of liability coverage in your state to ensure that you have enough coverage.

Commercial auto insurance policies are, in general, expensive. However, if you only get commercial auto liability coverage, it may be cheaper. However, it may not cover you for everything that may happen to you and your car. Make sure you understand the pros and cons of having commercial auto liability insurance coverage only.

What does commercial auto liability insurance cover?

Commercial auto liability insurance covers you when you are found to be at fault in an accident and the accident causes damages to the other driver(s). It pays for the personal injury and property damage of the other driver involved in an accident.

You need to keep in mind that commercial auto liability insurance doesn’t cover you or your car in any circumstance. So, if you are involved in an accident, the other driver is at fault, and they don’t have insurance. You are not protected if you only have commercial auto liability coverage. Since this coverage doesn’t cover you or your car, if your car is damaged in this accident and the other driver is at-fault but they don’t have insurance, you have to pay for your car damages by yourself.

How much does commercial auto liability insurance cost?

Business owners can expect to spend an average of $175 per month or $2,100 yearly for a full coverage commercial auto insurance policy. People who are covering specialty vehicles will spend more than those who only have small vans or trucks. 

However, commercial auto liability coverage is much cheaper. The average cost of commercial auto liability insurance is just around $80 per month, or &960 per year. However, as you know by now, the coverage of commercial auto liability insurance is also limited.

Several factors affect the cost of your commercial auto insurance policy. One factor is the industry you’re in because each industry has its own risks. Another is your location. If you work in a high-traffic area or an area with a large number of accidents, your cost will be higher than in a low-traffic area. 

You will pay more for a commercial automobile policy than for a personal vehicle policy. You may be wondering why that is. Commercial vehicles are on the roads more often than personal vehicles, which increases the risk of an accident. Also, commercial vehicles tend to be heavier than your average personal automobile. 

Learn more at the average cost of commercial auto insurance

Factors affecting the cost of commercial auto liability insurance

Basic factors affect the price of your business auto insurance policy. Your insurance company will calculate the costs based on these factors as well as its internal criteria. The basic factors are:

  • What kind of vehicles do you own
  • How many cars do you need to insure
  • How far and how often do you drive for business
  • The driving records of everyone who drives for your business

Additionally, the type and amount of coverage you purchase will affect your premiums. Your policy limits also factor into your costs. 

Best commercial auto liability insurance providers

One of the best places to begin shopping for commercial auto insurance is with your personal auto insurance company. Many insurance companies now offer commercial auto policies and personal auto insurance policies. The most straightforward course of action is to contact your current agent and ask if they provide commercial auto insurance policies.

If you strike out there, multiple companies offer commercial policies. Shop for multiple quotes before making a choice. One way to do that is to request quotes from a broker like Simply Business or InsurePro. Brokers do the legwork of shopping multiple quotes at once. 

Another option is to do the legwork of comparing quotes yourself. In other words, create a list of the best commercial auto insurance companies and contact them individually to solicit a quote from them based on the makeup of your business. Often, this process is made easier by online quote generators on websites. 

Once you have your quotes, make sure you are comparing identical coverages and liability limits. Otherwise, you may think you’re getting the best value possible when you aren’t getting the proper amount of coverage for your needs. Don’t forget to ask about potential discounts like safe driver or multiple policy discounts. 

Some companies to consider asking for a commercial auto liability insurance quote include: 

  • Progressive: Best Overall. They are the biggest insurer of commercial vehicles. They offer quotes online to all comercial vehicles. And they offer several discount programs to help reduce the rates.
  • biBERK: Best for low-cost coverage thanks for its direct-to-consumer business model. They claim to save 20% on your premiums. A subsidiary of Berkshire Hathaway.
  • THREE: Best for a comprehensive and affordable business insurance policy, including commercial auto coverage
  • Simply Business: Best for comparing several quotes. Simply Business is a leading brokerage firm specializing in small businesses.
  • The Hartford: Best for comprehensive coverage
  • Best if you prefer working with a knowledgeable agent who understand your industry well.

Each of these companies has its own good points. For example, THREE provides a comprehensive insurance policy that includes all the coverages you need for your business in one three-page policy. biBERK is best if your are looking for a low-cost option. Simply Business will compare multiple quotes and provide you with more than one quote based on the questions you answer during their screening process. The companies we’ve listed here all at least offer online quotes; some of them allow you to purchase and manage your policy online. 

What is covered by the standard commercial auto insurance? 

There are a number of coverages that are available with a commercial auto insurance policy. Policies can include bodily injury, property damage, collision, medical payments, and underinsured or uninsured motorist coverages. You can also get policies that have comprehensive and personal injury coverages. 

Typically, a commercial policy covers the vehicle rather than the driver. Commercial policies usually include language that covers the car regardless of who drives it for business use. Many of the coverages included in a commercial policy are the same as the coverages found in a personal policy. 

Learn more at why small businesses need to have commercial auto insurance

Closing thoughts

Commercial automobile insurance is a must-have if you use a vehicle for routine business activities. That can be client meetings or deliveries. Sometimes, a simple lunch trip is considered business use. 

To find the best cost possible for your commercial automobile insurance, shop for multiple quotes. You can do that by either shopping with brokers or shopping with multiple individual companies. Most shopping for quotes can be done online. 

Consider the basic factors that contribute to the cost of your premiums, and realize that the insurance company will likely have other criteria it uses as well. Remember to compare liability limits and coverages that are identical so you get a true sense of the cost of the policy. If you have questions regarding how to choose a commercial auto policy that is well-suited to your business, contact your current insurance agent. You might even find that they can offer you a business auto policy at a discounted rate. 

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