Personal Auto Insurance vs. Commercial Auto Insurance

For small firms, the distinction between personal and commercial vehicles is frequently hazy. When a small business utilizes a vehicle to transport personnel, move equipment, or deliver items, it is a widespread misconception that the owner's personal auto insurance coverage will cover these activities. Nonetheless, this is not the case.

Personal vs. Commercial Auto Insurance

The primary distinction between personal and business auto insurance is the liabilities covered. While both insurance cover vehicle repairs and medical expenses after an accident, commercial coverage often covers larger claims, various types of vehicles, and more sophisticated legal difficulties.

Commercial Auto Insurance

This policy covers accidents that occur while you or your workers are carrying goods, supplies, employees, or clients in a company vehicle. Typically, a commercial policy insures all employees as additional insured parties, allowing any employee with a valid license to operate the vehicle.

If you frequently move goods, drive employees/clients, charge passengers for rides, haul work-related cargo, or tow a trailer used for business, you must obtain commercial auto insurance.

Personal Auto Insurance

Personal coverage only covers accidents that occur during personal use of the car, such as traveling to and from work and driving for leisure. You may require commercial auto insurance if you use your vehicle for professional purposes beyond commuting.

Personal auto insurance for business use is often less expensive than commercial auto insurance. These are intended for individuals who use their vehicle for ridesharing or seasonal or part-time jobs.