Business Vehicle Insurance vs. Commercial Auto Insurance



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As a business owner, having an operational motor vehicle is fundamental as it can save you both time and money. A business vehicle offers business owners a great deal of convenience. Business owners may use the car for a wide range of activities such as running errands, meetings with clients or suppliers, and transportation of goods.

Motor vehicle insurance is available to motorists in three main types – personal, business, and commercial motor insurance. The most common of these is personal motor insurance, which covers motorists against third-party damages such as theft, collisions, and medical expenses due to injury.

And while you may already have business insurance, does your policy cover your work vehicle? This guide provides in-depth details on the difference between business and commercial vehicle insurance. It further highlights the variance and similarities between comprehensive and personal liability auto insurance coverage.

Business Auto Insurance

Business auto insurance offers motorists similar coverage as personal motor insurance. The difference is that business auto insurance exclusively covers accidents or foul play when motorists use the car for business-related activities.

A business auto insurance policy also covers medical bills, rehabilitation treatment, or loss of wages should an employee or car passenger sustains injuries. For example, your business auto insurance will cover the costs if you are involved in a collision or hijacking while going to a business meeting in a company car.

What Is Business Car Insurance?

Business car insurance offers motorists coverage against accidents or damages that may occur to the vehicle or driver during business operations. Motorists can enjoy the benefits of car insurance if they use it for business-related purposes.

For example, suppose you are a victim of a hijacking or collision during the delivery of business goods or transporting people for business-related matters while using your vehicle. In that case, you are eligible to claim benefits from your business auto insurance provider.


What Is Commercial Vehicle Insurance?

Commercial vehicle insurance protects business owners from damage or foul play on cars that exclusively belong to the company. Business owners may include company vehicles such as trucks, buses, or taxis and vehicle accessories like trailers in the company vehicle insurance policy.

Commercial vehicle insurance cover differs from the typical personal liability cover because this policy will not pay out benefits under certain circumstances. Instances where a vehicle is involved in a collision, reported stolen, or damaged by a third-party while not used for company purposes are not covered.

Auto insurance for business cover also includes coverage for medical expenses and loss in income of an employee should they be injured or disabled during the accident.

Insurance for Commercial Truck

Auto insurance for commercial vehicles like trucks, mini-buses, and buses typically costs more than the average cover for a sedan or hatchback. Commercial vehicles have many intricate electronic and mechanical parts, thus driving up the insurance premium.

A business owner should take out auto insurance coverage on commercial vehicles as the out-of-pocket repairs and liability costs can quickly skyrocket. Business owners are encouraged to shop for the most suitable auto insurance policy by comparing commercial car insurance quotes from various reputable insurance providers.

Commercial vehicle owners must include the value and specifications of the cars they wish to cover to avoid getting an insurance policy that will not cover the costs of damages or offset the loss of revenue generation from the vehicle.

Other Types of Insurance to Consider for Your Business


Business vehicle insurance is crucial for protecting company assets and employees. However, it is advised that you consider other forms of insurance coverage to further safeguard your business against employee claims and lawsuits.

Workers Compensation Cover

In addition to the benefits that an injured employee is subject to receive from commercial auto insurance, the employee will also be eligible for worker’s or workmen’s compensation benefits.

Workers’ compensation coverage safeguards employers and their workers against expenses incurred from occupational injuries, illness, or death.

Some benefits that employees are entitled to receive from worker’s compensation cover include:

  • Loss of income due to illness or injury
  • Medical expenses
  • Rehabilitation
  • Compensation for permanent disability or death

The compensation cover will not come into effect should it be determined that the injured employee was under the influence of drugs or alcohol, or ignored the workplace safety guidelines. Or if the incident did not occur while they were on duty.

Employers Liability Cover

While workers’ compensation cover safeguards both the employer and worker, employers’ liability cover primarily focuses on preserving the employer from financial loss due to lawsuits or claims by their employees.

Employer’s liability insurance covers expenses incurred by employee lawsuits that accuse the employer of negligence. Costs such as legal fees, fines, and loss of revenue are all-inclusive under the employer’s liability coverage.

Business owners are encouraged to have both worker’s compensation and employer’s liability insurance to ensure that they avoid significant financial loss brought by employee lawsuits. What the compensation cover will not cover, the employer’s liability cover will – and vice versa.


Public Liability Cover

Public liability insurance protects business owners from lawsuits or claims from third parties that may sustain injuries from incidents related to business activities. For example, passengers of other vehicles involved in a collision with your company vehicle may sue you for medical bills and damage to their cars.

This cover also includes claims made by passengers that you may be traveling with, pedestrians, bystanders, or cyclists that sustain injuries from the accident.

Closing Remarks on Auto Business Insurance

Auto business insurance is a necessity for all business owners. You must have a policy whether you are a business owner using your private vehicle or a fleet of commercial vehicles.

The cover will ensure you avoid unexpected financial losses that may come from employee lawsuits, damage by third parties, or severe weather conditions. If your business has one or more employees, consider getting both workman’s and employer’s liability cover as well.

Employee lawsuits and claims against employers are the primary cause of financial distress for business owners across all sectors. Protect yourself by getting insurance, thus significantly reducing unexpected out-of-pocket expenses.

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