Does your business need commercial vehicle insurance? It seems like an easy question—but is it?
- What if you only drive your car for work once in a while?
- What if your business is growing and you hire a new employee – are they covered?
- What if you need to travel across the border for a conference?
Commercial vehicle insurance can bring about some tricky questions, and you don’t want to be caught without coverage when you thought you had it.
Does every business need commercial vehicle insurance?
Typically you only need commercial vehicle insurance if you use the vehicle a lot for work or if it’s crucial for your business. Consider what your business offers, what materials you deal with, and if employees drive for you. Could you benefit from protection against property damage or liability claims?
We recommend businesses that regularly do the following activities consider commercial vehicle insurance:
- Making deliveries (retail products, food items, flowers, newspapers, etc.).
- Airport transportation.
- Uber, Lyft, taxi, shuttle, and limousine services.
- Maintenance and/or sales visits.
- Medical house calls or home care.
- Driving to weddings, concerts, and events (caterers, DJs, bands, etc.).
- Driving to job sites with equipment (plumber, HVAC, electrician, construction worker).
- Transporting housekeeping equipment for business use (cleaning services).
- Transporting hazardous or flammable materials.
- Towing other vehicles.
- Using, carrying, or transporting cranes.
- Freight transportation.
If you use your vehicle often for company purposes, if it has a commercial license plate, or if it registered as a company vehicle, you will need to secure commercial vehicle insurance for it.
Is commercial vehicle insurance just for fleets?
Nope! Rows and rows of bright white service vans is the first thing you may think of when you hear commercial vehicle insurance, but it’s not just for fleets. Plenty of sole proprietors need this kind of coverage as well, including:
- Personal trainers
- Dog trainers
- Yoga instructors
That’s not an exhaustive list, by any means. You may find that fleet pricing is lower on a per-vehicle basis compared to insuring a single vehicle, but that differs by provider and policy (we’ll help you with that).
I’m a sole proprietor. Do I need commercial vehicle insurance?
This is typically where things get unclear for people. If you work from home and are hesitant to secure commercial auto insurance, consider that if you get into an accident driving to a business meeting, your personal auto insurance policy may not cover the damages.
Sometimes you can upgrade your personal auto insurance policy to include infrequent business use, but the availability of that coverage depends on your provider.
Did we mention that commercial vehicle insurance is tax deductible, by the way? Another reason it’s better to be safe than sorry.
What does a commercial vehicle insurance policy cover?
You can choose between a standard commercial vehicle insurance policy that comes with basic coverage and add-ons that will cover you in special circumstances (like if you travel outside the country for work.) Larger vehicles may also need a special policy.
Each provider and policy is different, so like we always say—read the fine print. To give you an idea of what can be covered, here are some typical options:
- Property damage liability.
- Liability for bodily injury to others.
- Liability for bodily injury to others that occurs outside the province in which you reside.
- Personal injury to yourself.
- Personal injury to your employed drivers or passengers (lost wages, medical expenses, etc.).
- Collision coverage for costs associated with the accident, regardless of fault.
- Comprehensive coverage for damage other than collision (what’s the difference?).
- Medical and funeral expenses.
- Uninsured or underinsured driver coverage.
- Non-owned auto coverage for rented or borrowed vehicles.
- Loading and unloading liability (furniture delivery, moving trucks, large equipment, etc.).
- Rental vehicle for when your commercial vehicle is being repaired.
- Towing and labour costs.
If there are specific risks in your line of work then you’ll want to consider increasing your liability coverage. The typical amount is $1,000,000, but larger vehicles transporting flammable or dangerous materials can cause a lot more damage than the average passenger vehicle. More liability limits would be prudent in that case.
How much does commercial vehicle insurance cost?
As usual when it comes to insurance premiums, the price depends on many factors. To get an idea of what your own commercial vehicle insurance might cost, ask yourself the following:
- How many vehicles do I have to cover?
- What type of vehicles are they?
- Will there be other people driving on behalf of the company?
- Does anyone driving company vehicles have a poor driving record?
- How often do I and/or my employees drive?
- Is there long distance travel?
- Is there out-of-country travel?
- Do you drive in poor weather and high-risk terrain?
- Do you transport/handle dangerous or flammable materials?
- Do you have valuable equipment in your vehicle?
Traditionally, farming and construction vehicles are the most cost-effective to insure, while heavy cargo trucks and transport vehicles are often the most expensive.
You can get a quote for your commercial vehicle insurance from one of our aha representatives.
If I have commercial vehicle insurance, do I need personal auto insurance?
Commercial vehicle insurance policies will usually cover occasional personal use of the vehicle as well, but it is not a guarantee. Ask your provider about this specifically before deciding on your coverage.
Do I need commercial vehicle insurance if I deliver pizza or drive with a ride share app?
Yes. Some insurance companies have designed a specific policy for ride share drivers, while others have it included in their regular personal auto insurance policies. Double check the fine print of your existing insurance policy—you may already be covered.
If you are an employee, you’ll want to speak to your employer about their existing coverage and if it extends to other drivers.