Commercial auto for small business

When you need commercial coverage

• The vehicle is titled or registered to the business
• Employees drive it
• It's used primarily for business rather than incidentally
• It carries commercial signage, racks, or specialised equipment
• You haul goods, tow, or deliver for payment
• A client or contract requires a certificate of commercial insurance

What commercial adds

• Higher liability limits than personal policies typically write
• Coverage for employees as drivers
• Coverage for business use that personal policies exclude
• Coverage for tools and equipment carried, on some policies
• The ability to issue certificates of insurance to clients
• Coverage for vehicles owned by the business as an entity

The coverage most are missing

Hired and non-owned auto. If an employee runs an errand in their own car, or someone drives a rented vehicle on business, the business can be pursued — and the employee's personal policy protects them, not you.

It's usually inexpensive and it's the gap most commonly found in small business insurance. Ask about it specifically; it isn't always included by default.

Getting the details right

• List every vehicle and every driver accurately
• Tell the insurer what the vehicles actually do, including radius of operation
• Check whether tools and equipment in the vehicle are covered, or need separate coverage
• Set limits against what you could be sued for, not the minimum
• Consider an umbrella policy above the auto and general liability layers
• Review annually, and whenever you add a vehicle or an employee driver

Driver screening matters

Insurers rate on the drivers, and a business is generally responsible for who it lets drive. Checking driving records before allowing someone to drive on your behalf is basic risk management and some insurers require it.

Have a written policy about who may drive, and keep it current.