What's the difference between Business Auto and Personal Auto?
When it comes to business and commercial vehicle insurance, the basic components of an auto policy are similar to personal insurance, but coverage needs can be very different depending on what the vehicle is used for and what kind of vehicle it is. Generally speaking, your business auto insurance needs to include liability (damage to other property or bodily injury) and comprehensive or collision coverage if you want it. Additional coverage for commercial vehicles would be things like customized equipment, higher towing limits, and higher limits for extended transportation (replacement rentals). You can also get liability and physical damage extended to vehicles that the business uses but doesn’t own, such as Hired Autos (rented) or Non-Owned Autos (borrowed).
The other unique thing about business auto and trucking insurance is that you may also need coverage for the property being transported. The policy type is known as ‘Inland Marine’ coverage, but it is commonly referred to as Cargo (or ‘on-hook’ for towing). Cargo coverage can protect the property even when it’s in storage at a warehouse or terminal, but you may also want to make sure that you have General Liability if you or your drivers are loading, unloading, or storing property since the auto liability only applies to liability claims involving a vehicle.
If you are transporting property for hire or across state lines, or the truck is over 26,000lbs, you may also need state or federal filings– which is simply a formal process to verify that you have the insurance required for the trucking or transportation service you are providing.
Every vehicle and use type presents a different set of possible concerns for the business, so an agent can be very helpful in making sure you have the right coverage for the vehicle(s) you have and how you use them. The most common categories of vehicle types include:
These are vehicles you would normally see on a personal auto policy- but they are titled to the business or being used on a regular basis for business purposes, so they can and should be insured on a business policy.
These are usually pickup trucks or vans that are used to get to and from customer locations. You and your employees may also have tools, equipment, or supplies in these vehicles.
This is a big category that can include any type of vehicle that is designated to transport things from point A to point B. Sometimes the business owns the vehicle and the stuff it’s carrying, or the business may be a trucking company ‘for hire’ who transports things that they don’t own. The ownership of the vehicle, the cargo, and who the driver works for will all play a role in what type of business auto or trucking insurance that your company needs.
The technical term for transporting people for a fee is called “livery”. Public passenger vehicles can be cars or vans or buses used as shuttles, taxis, or charters. Uber and Lyft vehicles are also considered to be livery or public passenger when the vehicles are on the clock.