Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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UPDATED: Jul 14, 2021

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Businesses that own cars for conducting daily operations must obviously insure those vehicles. In some respects, the policies that companies get are just larger versions of the typical individual policy. But in other respects, business car insurance can be quite different.

Car insurance quotes for businesses are available by entering your zip code right now!

Knowing the details, restrictions and types of business car insurance available is the first step to finding a policy that truly protects your assets. Review those details, and then use the free tool provided to compare your options.

Business Car Insurance Coverage

All 50 U.S. states require a minimum liability amount for bodily injury, property damage, and general liability. Your state might require higher minimums for business vehicles. The only way to be sure is to check with your state’s motor vehicle or insurance department.

Higher minimums aside, business car insurance policies will offer the same type of basic coverage with a few additions. The first addition is bodily injury coverage for both the employees riding in the car and any accident victims outside the car. The second addition is full loss replacement in the event of theft, fire, or total loss in an accident.

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Restrictions on Business Car Insurance

Your insurance provider will not be willing to take unnecessary risks on you or your vehicles. Therefore, coverage is restricted to vehicles and drivers engaged in company business during normal business hours. After business hours may be included for companies whose circumstances dictate.

In the case of a company executive who is given personal use of a company car, the policy is structured to include such usage. If your policy does not include coverage for personal use, and an employee has an accident during a period of personal use, the company or individual will be liable for any associated costs.

Depending on the type of business you operate, and where that business is operated, there may also be restrictions on weight, weather conditions, and where a vehicle can and can’t be driven. Again, check with your insurance provider for details about these restrictions.

Business Car Insurance for Transportation Providers

Companies that provide public transportation in the form of taxi, livery, or medical motor service are subject to an entirely different set of regulations by the various states. They may also be subject to different standards for insurance purposes. Special licenses, training programs, certifications, and safety requirements may all be part of acquiring business car insurance.

The biggest factor driving these differences rests in the fact that a company providing public transportation is assuming responsibility for passengers, as well as employees and other accident victims. Passenger injury could result in damaging lawsuits and medical expenses that could ruin a small business. Car insurance companies know this and have to protect themselves.

Those Who Don’t Need Business Car Insurance

Business car insurance is designed to cover vehicles used during the course of providing the company’s core products and/or services. For example, a moving company cannot provide its services without a fleet of trucks, so those trucks are insured. Running to the office supply store for printer ink is not essential to your core business activity, so a personal vehicle used for such purposes will not need to be insured as a business vehicle.

Small, home-based businesses often fall into this category of not needing business car insurance. As long as the business owner is not involved in public transportation, specified delivery or courier services, property maintenance, or construction, a personal vehicle used for minor business needs like making bank deposits will be covered by an individual policy.

Gray areas exist for drivers who may work as delivery agents for restaurants, or couriers under sub-contract. In cases like this it’s important to check with the business owner to make sure his normal policy covers you for business activities. If not, check with your own insurance company. Just assuming one or both providers will cover accidents is a dangerous practice that should be avoided.

Business car insurance is a costly part of any business that employs company vehicles. One way to reduce overall vehicle costs is to consider using leased fleet vehicles. Your business will still be required to carry its own business car insurance, but fleet leasing usually means normal repair and maintenance costs are absorbed by the leasing company.

Good efficiency practices, route management, and responsible driving practices are all ways to further reduce the cost of owning and operating business vehicles. You may not be able to eliminate the cost of business car insurance, but you also don’t have to let combined vehicle expenses break the bank.

Enter your zip code into our search tool and get the best online car insurance quotes in your area now!