How to Insure the Company Car for Your Business

Company car insurance tends to cost between $50 and $200 a month. Request a personalized auto insurance quote from your current business insurance agent.
Written by Cheryl Knight
Edited by Pat Roache
You can’t just use personal
car insurance
for a company car—you need commercial car insurance to cover you and your employees while using company vehicles for business. 
  • Commercial auto insurance covers vehicles that are owned by your business and driven for work.
  • To get commercial car insurance, contact a local independent insurance agent.
  • Although costs vary, commercial car insurance is relatively affordable for the protection it can provide your company.

Company car insurance costs

Insurance experts estimate that
commercial auto insurance
costs between $50 and $200 a month for small businesses—but company car insurance rates can vary widely because there are so many factors that can impact your rate:
  • Industry-specific risks
  • The type and number of vehicles you’re insuring
  • Your employees’ driving records
  • How often vehicles are driven
  • The type and limits of your coverage
  • Your company’s claims history

How to get commercial vehicle insurance

To get commercial car insurance, you’ll need to call a local independent insurance agent. 
If you already have any type of business insurance—like a business owner’s policy (BOP)—it’s a good idea to talk to your existing insurance agent first. It can be easier and more efficient to use one agent as they can help you make sure you’re fully covered for your unique business needs.
Additional requirements: Your insurance agent should let you know if you need to fill out a Business Auto Coverage Form (BACF). Insurance companies commonly use a BACF to provide business auto liability insurance.

Company car insurance vs. personal car insurance

The main differences between a commercial and personal auto insurance policy are:
  • Increased liability risk: There are higher liability minimums compared to a personal car insurance policy.
  • Extended coverage: Coverage options can apply your liability insurance to any existing vehicles owned by the company, as well as any new business vehicles the company purchases in the future.
  • Single deductible: Commercial car insurance often offers
    single-deductible options
    that allow a company to only pay one deductible on a trailer and vehicle involved in an accident as opposed to paying a deductible for both separately.
  • Combined single limit: Your policy may also include a combined single limit (CSL) per accident—meaning you’ll have one payout limit that covers property damage liability and bodily injury liability. Most personal insurance policies have separate limits for each. 
Need to know: Combined single limits usually start at around $100,000, although you sometimes can choose higher limits ranging from $500,000 or more.
Commercial car insurance is offered by a number of the nation’s top insurers, including:
Talk to your local independent agent to find out which company is best for your business.

You need commercial car insurance if your company owns a vehicle

Most states require businesses to cover vehicles with commercial auto insurance based on the same
minimum liability insurance coverage
required for personal insurance. 
This allows insurance liability for accidents that happen in a company car to remain separate from a personal auto policy.
There are several industries where you might need company car insurance, including:
  • Landscapers
  • Electricians
  • Painters
  • Carpenters
  • Plumbers
  • Florists
  • Real estate agents
  • Businesses that make sales calls
  • Cleaning services
  • Anyone who transports clients as a service
  • Mobile services (like mobile dog groomers)
  • Independent contractors 
You may need additional coverage if you use your company vehicle for things like:
  • Operating as a chauffeur, taxi, or rideshare
  • Transporting hazardous materials
  • Towing vehicles
  • Delivering food
  • Driving heavy trucks
  • Pulling large trailers
Big picture: If someone sues your company for personal or property damage, the company pays any settlement and not an individual business owner.

Company car insurance coverage: Liability, comprehensive, collision, and more

Business auto insurance typically includes
liability insurance
and comprehensive/collision coverage to protect cars, trucks, SUVs, and vans owned by your company. Note that a standard company car insurance policy may not cover heavy trucks and trailers.
Liability coverage: 
  • Property damage liability
    : If you’re at fault in an accident, property damage coverage pays for physical damage (up to your coverage limits) to other people’s vehicles, homes, business property, and more.
  • Bodily injury liability
    : If you’re at fault in an accident, bodily injury liability covers the other person’s related medical expenses up to your policy limits.
Coverage for your vehicle damages: 
  • Comprehensive insurance
    : Comprehensive coverage pays up to your coverage limits for damage to your vehicle due to non-collision-related incidents like falling objects, severe weather, fire, theft, and vandalism.
  • Collision insurance
    : Collision coverage will pay for damage after collision with an object or another vehicle, up to your policy limits—regardless of who is at fault.
Optional types of coverage: 
  • Uninsured/underinsured motorist coverage (UM/UIM)
    : Uninsured motorist coverage pays up to your coverage limits if you’re in an accident with a driver who doesn’t have insurance (or doesn’t have enough insurance to cover your medical bills). Some states require UM/UIM.
  • Medical payments (MedPay)/Personal injury protection (PIP)
    : These coverages pay for medical bills following an accident. Note: These aren’t available in some states, but they’re required coverage in others.
  • Rental reimbursement
    : This coverage will reimburse your company up to your coverage limits for a rental vehicle after a claimable accident.
  • Roadside assistance
    : Roadside assistance services will help you get back on the road after locking your keys in the car, having a flat tire, running out of gas, and more.
Who it covers: Company car insurance typically covers all employees with a valid license—and each person’s driving history may impact your insurance rates.
There are some exclusions:
  • Tools or materials that are inside the vehicle
  • Employees’ personal vehicles that are driven for business
  • Commuting to and from work
  • Non-owned trailers (you’ll need trailer interchange insurance for that)

HNOA insurance covers personal vehicles for business use

If your employees drive their own vehicles for business purposes, they may not be covered under your commercial auto insurance policy or their personal auto insurance coverage. That’s where hired and non-owned auto insurance (HNOA) comes in. 
HNOA kicks in if an employee gets into an accident while they’re driving their own vehicle for business purposes like:
  • Running errands
  • Picking up packages
  • Dropping off shipments, 
  • And more!
Keep in mind: This coverage will only pay for legal bills resulting from that accident.
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Business auto insurance premiums can sometimes be deducted as a business expense. Check with your tax preparer to find out if this will apply to you.
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