A Guide for Small Business Owners: Commercial Auto Insurance
If you use a vehicle for work, whether for deliveries, transporting equipment, or meeting clients—you may not have the coverage you think.
Many small business owners assume their personal auto insurance protects them while on the job. It doesn’t. That gap in coverage could leave you exposed to serious financial risk in the event of an accident.
That’s where Commercial Auto Insurance comes in. It provides essential protection for businesses and self-employed professionals using vehicles for work. However, even commercial policies can have coverage gaps, particularly when it comes to transporting tools, equipment, or products.
Let’s break down what Commercial Auto Insurance covers, what it doesn’t, and how to ensure you’re fully protected.
What Does Commercial Auto Insurance Cover?
Commercial Auto Insurance is designed to protect vehicles that are used for businesspurposes. It provides:
- Liability Coverage – If your business vehicle causes an accident, this covers bodily injury and property damage to others.
- Physical Damage Coverage – Pays for repairs or replacement of your business vehicle after an accident.
- Medical Payments Coverage – Covers medical expenses for you and your passengers after an accident.
- Hired & Non-Owned Auto Coverage – Protects vehicles your employees use for work, even if they don’t belong to your business.
If your business owns, leases, or regularly uses vehicles, a Commercial Auto policy is a must. But even with this coverage in place, many business owners make one major mistake: they overlook Inland Marine Insurance.
Coverage Limitations in Transporting Goods or Equipment
Business owners in construction, trades, and manufacturing often assume that a Commercial Auto Insurance policy provides coverage for tools, equipment, and materials transported within the vehicle. However, commercial auto insurance covers the vehicle itself but does not extend to its contents.
If tools, inventory, or materials are stolen, lost, or damaged in transit, a standard Commercial Auto policy does not provide coverage for these losses.
To ensure adequate protection, businesses that transport goods or equipment should secure an Inland Marine policy, which is specifically designed to cover mobile property.
Inland Marine Insurance: Protecting things in transit
Inland Marine Insurance provides coverage for tools, equipment, and goods while they are being transported or stored offsite. This coverage is essential for:
- Contractors & Tradespeople – Protects power tools and equipment stored in work vehicles, covering losses due to theft or damage.
- Construction Companies – Covers equipment and materials while being transported between job sites.
- Manufacturers & Distributors – Provides coverage for goods in transit from warehouses to retailers.
For businesses that transport valuable items, Commercial Auto Insurance alone is not sufficient. Inland Marine Insurance fills this gap, ensuring comprehensive protection.
Coverage Gaps for Personal Vehicles Used for Business
Individuals using personal vehicles for business—such as real estate agents, consultants, salespeople, and gig workers—often face significant coverage gaps.
Personal auto policies typically exclude business use. This means claims may be denied if the vehicle is used for:
- Client meetings (e.g., real estate agents, consultants)
- Sales or delivery activities
- Transporting business-related materials
Even if a claim is paid, the insurer may later cancel or non-renew the policy if the vehicle was not originally underwritten for business use. Businesses and self-employed professionals should consider a Business Auto or adding a business use endorsement on their personal lines auto policy if available.
Final Thoughts: Protecting Your Business on the Road
If you’re using a vehicle for business—whether it’s a company truck, a personal car for sales calls, or a van for deliveries—you need the right insurance.
- Commercial Auto protects your business vehicle, but not what’s inside.
- Inland Marine covers tools, equipment, and transported goods.
- Self-employed professionals need to check if their personal policy excludes business use.
If you’re unsure whether your current coverage is enough, let’s talk. We can help you review your options and make sure you’re protected before an accident or theft puts your business at risk.
