Is Commercial Auto Insurance Required in Texas?
Businesses in Texas that use vehicles for work purposes need to understand their insurance responsibilities. Commercial auto insurance isn't just a smart investment—it is often a legal requirement.
Texas Insurance Laws for Business Vehicles
Under Texas law, any vehicle driven on public roads must carry minimum liability insurance. This applies not only to personal cars but also to vehicles owned, leased, or used by a business. If your company owns a vehicle, or employees drive for work-related tasks, commercial auto insurance is typically required.
The minimum coverage limits, known as 30/60/25, are:
- $30,000 for bodily injury per person
- $60,000 for bodily injury per accident
- $25,000 for property damage per accident
These are the same liability minimums required for personal auto insurance, but businesses often need higher limits because of greater risk exposure.
When Commercial Auto Insurance Is Necessary
Not every business needs a commercial policy, but it becomes necessary when:
- The vehicle is owned or registered in the business’s name.
- Employees regularly drive the vehicle for work.
- The vehicle is used for transporting goods, equipment, or paying passengers.
- The vehicle is a truck, van, or specialty vehicle that exceeds personal policy limits.
For example, a construction company with work trucks or a catering service with delivery vans must carry commercial auto insurance.
Consequences of Not Having Coverage
Driving a business vehicle without the required insurance can result in hefty fines, license suspension, and legal liability. If an uninsured commercial vehicle causes an accident, the business may be personally responsible for damages, medical bills, and lawsuits. This financial exposure can be devastating for small and mid-sized businesses.
Additional Coverage Options
Beyond liability, commercial auto policies can include:
- Collision coverage for vehicle repairs
- Comprehensive coverage for theft, fire, or vandalism
- Uninsured/underinsured motorist protection
- Medical payments coverage for drivers and passengers
These protections give businesses stronger financial security compared to relying only on minimum liability insurance.
Conclusion
Yes, commercial auto insurance is required in Texas when vehicles are used for business purposes. While the state mandates liability coverage, most companies benefit from broader protection to safeguard assets and reduce risks. Ensuring compliance not only avoids penalties but also provides peace of mind for business owners.