What is commercial auto insurance?
Commercial auto insurance covers cars, trucks, pickups, vans, trailers, and fleets used for work purposes. It protects your business, drivers, and your vehicles from exposure to threats. This is referred to as IRCA or individually rated commercial auto insurance.
Do you have a construction company? Are you a travelling salesperson? Are you a consultant who frequently visits clients on-site in Toronto or across Ontario? You will require this type of protection.
Do I need commercial auto insurance?
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If you use your vehicle for commercial purposes, the answer is yes. We get a lot of questions about whether this is needed. Most are from self-employed individuals. Uber has also created a lot of questions. Many people incorrectly assume they can use their personal vehicle for work. This is not true. Requirements depend on use and how it is registered.
You need commercial auto insurance if the vehicle is owned by the company and used in the following ways :
- Transporting goods, equipment and supplies
- Construction and contracting
- Sales visits and calls
- Driving people around (e.g., Uber)
- Employee use
Even if you only use it occasionally, you need to be insured properly.
Types of businesses that need commercial auto coverage
Any business that uses a vehicle needs a commercial auto policy. Here is a list of companies that use this coverage:
- Auto dealerships, mechanics, and auto service providers
- Driving schools
- Delivery services (FedEx, UPS, Amazon)
- Limousines and taxis
- Restaurants, caterers, bakeries, and florists
- Contactors and construction companies
- Transportation providers
What’s the difference between personal vs commercial auto insurance?
At a high level, personal and commercial auto policies do the same thing – they provide you with protection against common threats.
They offer financial protection and provide resources to recover if you file an insurance claim. They differ in the type of threats, plan limits, and policies available. Car insurance for personal use is catered to individuals. Policies are customized for all types of businesses and functions.
One thing they have in common is that personal insurance will not cover you when driving for business use, and commercial insurance will not cover personal use driving.
