When you think of "commercial autos" you might imagine freight trucks and big buses. But "commercial auto is everything from little sedans to the biggest trucks and buses," says David Golden, assistant vice president of commercial lines for the Property Casualty Insurers Association of America (PCI).

Most "commercial autos" are light vehicles, he notes, such as sedans, pickups and panel vans.

If you use a vehicle primarily for business, a personal auto policy is not the right insurance for you. And if you have a claim, it could be denied if you were using a personal auto policy on a vehicle you actually use for business.

How much commercial auto insurance do you need?

"The insurance coverage you need may be significantly greater than what regulators require, depending on the business that you are trying to protect. One of the best things you can do is consult with an insurance agent or broker who has some expertise in your industry," says Golden.

The legal minimum insurance requirements for commercial vehicles are decided by each state, or sometimes federal law. Here's a summary:

If you're insuring a light vehicle such as a sedan or pickup, the insurance minimums are generally the same as the minimum car insurance requirements for personal autos.

If you're insuring a large vehicle, insurance requirements are generally significantly higher. Some states use the federal insurance requirements for large commercial vehicles and some states set their own insurance minimums.

The weight of the truck (or number of passengers for a bus) typically determines what commercial auto minimums will apply. The threshold is often at 10,000 lbs. or 26,000 lbs. for trucks and 15 passengers for buses, according to Golden of the PCI.

Where the cargo is going determines whether state or federal insurance minimums will apply: interstate (it leaves the state) or intrastate (it stays within the state). Note that this refers to the cargo, not the vehicle itself, cautions Golden.

Some vehicles are regulated locally, depending on the business type. For example, a taxi for hire or a van used for a courier business might be regulated by the city or county, says Golden.

Some vehicles are regulated by the state. For example, a pickup used for a pesticide business may be regulated by the state's pesticide regulator.

A business insurance agent can help you sort out the insurance requirements that apply to your situation, as well as insurance limits that make sense for the business assets you want to protect.

The upshot is this: If you're using a light vehicle for a typical small business, you don't need to worry about federal insurance requirements or a state's higher commercial auto insurance requirements for bigger trucks, cargo carriers and buses. Your commercial auto policy requirements will likely be the same as your state's personal auto insurance minimums.

What does commercial auto insurance cover?

A commercial auto insurance policy always has liability coverage. This pays for injuries and property damage you cause. Some states require additional insurance such as uninsured motorist coverage and personal injury protection (PIP). And collision and comprehensive coverages are worth considering because they cover damage to your vehicle.

Here are common types of coverage:

  • Bodily injury liability coverage–pays for someone else's injury or death resulting from an accident you cause. This includes your legal defense if you're sued.
  • Property damage liability coverage—covers damage you cause to someone else's property -- such as a car or fence.
  • Personal injury protection—pays medical expenses for the driver and passengers of your vehicle, no matter who was at fault.
  • Uninsured & underinsured motorist coverage—pays for your injuries in case you're hit by a driver who has no liability insurance or not enough.
  • Collision coverage—pays for damage to your vehicle if you hit an object such as another car, fence or building, if the vehicle rolls over. It can also pay for damage to your vehicle if you're hit by someone else -- or you can make a claim against the other driver's liability insurance.
  • Comprehensive insurance—pays for the theft of your car or damage from vandalism, a crash with an animal, flood, fire, explosions and weather such as hail.
  • Other types of commercial auto coverage. A business insurance agent can help you identify special coverage you may need. For example, if your office manager stops by an office supply store and gets into an accident, your business could be liable for damages. A Non-Owned Auto Liability Endorsement can provide the necessary coverage.

How much does commercial liability insurance cost?

Here are estimated annual costs according to Trusted Choice, a group for independent insurance agents:

Vehicle type Commercial auto insurance cost
Auto $1,200 to $2,400
Truck $800 to $2,000
Taxi $5,000 to $10,000
Bus $35,000
Tractor trailer $2,500 and up


The cost of a commercial auto policy depends on several factors, including:

  • Type of business. Depending on the type of business, there will be different levels of risk and therefore price. For example, a construction company with multiple heavy trucks will pose more risk than a cleaning business that uses a single car to go to customers.
  • Location. Business vehicles in cities often have higher insurance rates than those in rural areas.
  • Vehicles. The year, size and type of vehicle, as well as the number of vehicles being used.
  • The drivers. All drivers who have access to your commercial vehicles can affect the rate. Drivers who have a history of claims or violations will usually mean higher premiums.
  • Coverage amount. It's no surprise that the more coverage you need or want, the higher the premium will be.

Ways to get cheaper business auto insurance

  • Keep a clean driving record. This can be one of the biggest factors in cost. Emphasizing safe driving practices for employees can save you money in the long run.
  • Request a higher deductible. Deductibles are found on collision and comprehensive coverage. It's the amount deducted from an insurance claims check. So, for example, if you have a $2,000 deductible you'll pay a lower premium than having a $500 deductible.
  • Buy only the coverage you need. For example, you may not want to pay for collision or comprehensive coverage on an older vehicle that's not worth much. If it's stolen or totaled, the potential insurance payout could be very small.
  • Ask about discounts. Discounts could include paying in full rather than monthly, paying with automatic withdrawals, not having claims for a few years, and having a general liability or business owners policy from the same company.
  • Compare commercial auto insurance quotes. Prices will vary among insurance companies for the same coverage, so it's a good idea to get quotes from several insurers.