Understanding the best auto coverage for your business is important to ensure you are covered for any contingencies. Whether your business delivers products or people, be sure that you update your policy as your business grows. Here are the answers to some of your frequently asked questions concerning commercial auto and fleet insurance to help better understand which coverage type is best for your business.

What is commercial fleet insurance?      

Commercial fleet insurance is for companies with multiple vehicles. It is similar to standard insurance but applies to many vehicles. Policies can be applied to small and large fleets.

Can you drive your personal vehicle for business purposes?

You can use your vehicle as transportation to get to and from work or a meeting. If any aspect of your job requires you to use a vehicle to complete tasks in your job description (i.e. deliveries, client visits), then you wouldn’t typically be covered by a basic personal car insurance policy if there was an accident.

Is commercial insurance cheaper than personal auto for my business?

Commercial auto insurance is not cheaper than personal auto insurance. Commercial auto coverage is typically more expensive because you’re at risk for higher liability and property damage claims when transporting people or goods for money.

What types of commercial auto insurance are available? 

There are three basic types of commercial policies available, each designed to suit your business size and needs:

  1. Business use: For a small business, a home-run business, or for individual entrepreneurs. Used for driving to various locations and meeting with clients. You can add “business use” to your personal auto insurance policy.
  2. Business use for multiple drivers: This provides the option to add multiple drivers to your policy. Multiple employees can utilize your vehicle and the insurance is paid by the owner.
  3. Commercial auto use only: Vehicles used exclusively for work purposes. Daily use with added equipment and features to a vehicle (i.e. tool bed in the truck).

Can anyone drive business vehicles with a fleet insurance policy?

Most fleet policies are usually arranged on an “Any authorized driver” basis, which means that anyone can drive with the permission of the company/directors under the fleet insurance policy.

Does fleet insurance cover any driver?

Fleet insurance provides coverage across a fleet of business vehicles. It allows you to insure all vehicles under one policy rather than individually, and you can either insure all drivers to all vehicles or assign named drivers.

Can I get fleet insurance for my family?

No. All three parts of the definition of a fleet must be satisfied for a fleet exemption. For example, the fleet exemption would not apply to a contract insuring a group of vehicles driven primarily for personal use, simply because they were insured under common ownership and are used for business purposes.

What is the difference between “any” and “named” driver policies?

Generally speaking, ‘Any driver’ policies have higher premiums, but offer the most flexibility and can be better for larger companies that may otherwise struggle to track and enforce specific vehicle usage. However, having young or convicted drivers on an ‘Any Driver’ policy can substantially raise the premium costs as you’re spreading the driver’s risk across all vehicles.

As a result, some insurers allow you to have ‘Any Driver’ policies with named drivers. For example, this would allow you to insure the majority of drivers to all vehicles, and only the higher-risk drivers (young/convicted drivers) would be named to specific vehicles. This can help reduce premiums but still maintain the efficiency of an ‘Any Driver’ policy.

For a smaller-sized company, it may make more sense to choose a ‘Named driver’ policy and simply assign drivers to vehicles. This is usually the most affordable option.

Does commercial insurance cover personal use?

Simply put, no. Many owners, especially those with home-based businesses, use their vehicles for individual and commerce purposes. This is, of course, fine to do. However, if you do this, then you require a commercial auto policy that ensures you have protection when you drive for work. Without it, you could have your insurance claim denied. If an accident occurs while running personal errands, your personal auto insurance will kick in. You need both types of insurance to ensure that you have adequate coverage.

Who would be covered under commercial auto and fleet insurance policies?

The owner and employees typically have coverage, so refer to your policy to verify who has protection (you can always add new drivers later.)

How are commercial auto and fleet insurance rates determined?

Several factors can impact your insurance rate, and you can keep your premium low by not having many claims on your record, employing experienced drivers, and encouraging good driving habits through training courses. Some factors that are used to determine your rate are:

  • Number of vehicles
  • Vehicle type
  • Experience of drivers who will be covered by your policy
  • How the cars are stored at night
  • Alarm systems in the vehicles

Do I need commercial vehicle insurance if I take a client out in my car?

Yes, you should have this type of policy if you transport clients or perform other commerce activities using your vehicle, due to greater potential liability issues. If you get into an accident, the potential for litigation would fall to you and your assets (not your business) if you don’t have commercial insurance.

What sort of insurance should a small business owner have to ensure proper coverage?

Commercial auto insurance is designed to fit the needs of your business, and it’s important to understand what is and isn’t included in your policy. To ensure you’re not leaving yourself vulnerable to risk and potential loss, here are some important coverage components for small business owners:

  • Injury to you, your employed drivers or passengers, including medical expenses and lost wages
  • Loading and unloading liability for when you’re transporting products to customers or events
  • Replacement car coverage for when your commercial vehicle is being repaired so you don’t miss out on work

If you operate your commercial vehicle in other provinces or states, additional coverages can often be purchased to ensure you and your employees are covered during those trips. Ask one of our isure representatives for more information.

Does the type of vehicle used affect the cost of coverage?

Like personal insurance policies, the type of vehicle you drive will have an impact on the type of coverage you need. Bigger, heavier commercial vehicles often cause more damage if they’re involved in an accident, and your coverage should reflect that. If you use an SUV, Jeep, truck, tractor, trailer or any vehicle specifically designed for construction or maintenance purposes, you should have commercial auto insurance coverage. If you own a business that utilizes both cars and large trucks or vans as part of your business plan, they can be put under the same fleet policy. It is not restricted to one type of vehicle, as long as they are being used for business purposes only.

What is the difference between fleet and non-fleet?

What differentiates a fleet vehicle from a commercial non-fleet vehicle is the number of commercial vehicles your business owns. Usually, if your business owns five or more commercial vehicles, this is considered a fleet.

What is the difference between commercial vehicles and fleet vehicles?

Commercial vehicles are designed for the transporting of goods or large groups of passengers. For commercial vehicles to be considered fleet vehicles, they must be owned by an organization, business, or agency rather than privately owned. Fleet vehicles can be any body type, meaning there are no size requirements – the only requirement is that they must be owned by a business rather than an individual.

Be sure to keep in touch with our isure brokers to update your policy as your business grows. We can always help answer any questions you may have regarding commercial auto and fleet insurance as they relate to your business.

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