Commercial auto insurance is a type of insurance policy that helps cover vehicles used for business purposes such as cars, trucks and vans. Commercial auto insurance covers vehicle damage and driver injuries.

Commercial auto insurance cost factors

Basic factors that influence the cost of your commercial auto insurance include:

Industry / profession – Not all businesses carry the same level of risk. An excavating business with multiple commercial vehicles has much higher exposure than an accounting firm that occasionally uses a car for running errands.

Location – You could expect to pay more to insure a commercial vehicle driven in a large city than a vehicle driven in a rural area. Additionally, areas with above average claims are typically priced higher.

Vehicles – Your vehicle’s year, size and use will influence your cost. For example, an older delivery van occasionally used by a bakery will generally be less expensive to insure than a new cargo van used more frequently by a company that transports expensive cargo. And coverage choice matters. If you choose to carry physical damage coverage , your vehicle’s value will be factored into your premium.

Driving history – Most insurance companies run a motor vehicle report for all drivers with access to your listed commercial vehicles. Drivers with multiple accidents or violations will have a negative impact on your premium. It’s common for your carrier to take the past three years of your driving history into account.

Coverage needs – Your commercial auto insurance cost will increase with more coverage. A $1 million liability policy will have a significantly higher premium than a policy with state minimum liability limits.

What’s covered by commercial auto insurance

Commercial auto insurance covers injuries that you or your employees may cause to other people and their property while driving. A typical commercial auto policy may include:

Auto liability , which protects you and your company by paying for bodily injury or property damages you may become legally liable for as a result of a covered automobile accident

Medical payments, which pays medical expenses, up to your coverage limit, for you, your employees and your passengers arising from motor vehicle accidents – regardless of who is at fault

Comprehensive coverage, which can help pay for damage to your vehicle from something other than another vehicle like vandalism, theft, weather events and accidents involving animals (subject to deductible)

Collision coverage, which pays for damage to your vehicle from another vehicle whether you hit another vehicle or object, another vehicle hits you, or your vehicle rolls over – regardless of who is at fault (subject to deductible)

Uninsured and underinsured motorist coverage, which pays for medical expenses, loss of income and other damages owed to you, your employees (expenses that are not covered by workers’ compensation) or your passengers when an accident is caused by an uninsured or underinsured motorist

A commercial auto policy also can include coverage for cars you borrow or rent, as well as coverage for employees who use their cars for your business.