Commercial Auto Insurance

Updated: 11 March 2024

What Does Commercial Auto Insurance Mean?

Commercial auto insurance is a policy for vehicles used for business rather than for personal use. It may cover trucks used by companies, a fleet of taxicabs, or even a car usually driven for a business purpose. This insurance is more expensive than the standard car insurance.

It is also known as a business automobile policy.

Insuranceopedia Explains Commercial Auto Insurance

A business that requires a vehicle for its operations needs commercial auto insurance rather than the standard motorist policy, even though the premiums are higher. The reason for this is that the mileage driven for business purposes is often considerably greater than that driven with a vehicle owned for personal use and this longer mileage makes it more susceptible to risk.

While coverage may seem the same as a personal auto insurance since it also covers damage, injury, and liability, the business aspect of it marks the difference and a payment for a claim is higher. For instance, a commercial vehicle can carry goods and even people that, in an accident, may not be covered by personal auto insurance or the amount paid out for it by such a policy might not be enough to cover the losses.


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