Company car insurance, more commonly known as commercial car insurance or business car insurance, covers cars that your company owns and cars that your employees drive while doing business for your company. This includes coverage to their own cars and rental cars.
If you’re a small business owner, you may have some questions about how company car insurance works and how it differs from personal car insurance — we’re here to answer them.
Who needs company car insurance?
If you have a company and you or your employees use vehicles as part of your business, you’ll likely need a company car insurance policy. You’ll need a company car insurance policy if:
1. Your business has vehicles titled in the company’s name
If your company owns any vehicles that are titled in the name of your business, those vehicles need to be covered by a company car insurance policy. Since they’re not owned and driven by an individual, they can’t be covered by a personal auto insurance policy.
2. You’re a business owner who drives your own vehicle for work
Vehicles used simply for commuting do not need to be covered by a company policy, so if you own a business and just drive your car to and from work, your personal policy is sufficient. But if you use your car to transport people, goods, or equipment for work, then you need a company auto insurance policy.
3. Your employees drive their own vehicles or rental vehicles for work
If your employees use their personal vehicles or rental cars during work hours (for more than just commuting) then you need a company car insurance policy to be sufficiently protected. Employees who get into a car accident while driving for work will be protected by both their personal policy and your company policy — meaning your business won’t be at risk in the event you’re held responsible for expensive damage.
How company car insurance works
Company car insurance works just like personal auto insurance in that it offers several types of coverage under one policy, and pays out when you make a claim. These coverage types include:
Liability coverage: In company car insurance policies, there is a combined single limit for liability coverage that includes bodily injury liability (BIL) and property damage liability (PDL).
Medical payment coverage/personal injury coverage: Pays medical expenses for the drivers and passengers of your covered vehicles during accidents.
Collision coverage: Pays for damages to your vehicle after an accident, regardless of fault.
Uninsured/underinsured motorist coverage: Pays for damages caused by a car accident with an uninsured driver or underinsured driver.
Commercial policies also offer a number of types of specialized coverage that personal auto policies do not. These include:
Trailer interchange coverage: For trailers your vehicles use that are owned by other companies.
Rental reimbursement with downtime: Pays for you to rent a temporary replacement if your company vehicle needs repairs.
Hired vehicle coverage: Provides coverage for rental cars or vans for employees or clients.
Non-owned vehicle coverage (also known as non-owned auto coverage): Covers you when your employees use their own cars to conduct business for you.
How to buy company car insurance
Most insurance companies that sell personal car insurance policies, like Allstate, GEICO, Progressive, Nationwide, and AAA, also sell commercial auto insurance policies.
If you already have a personal car insurance policy, contact your insurance provider and ask if they also offer company car insurance. And unfortunately, even if you are using your personal car for business, you’ll still likely need to keep your personal car insurance policy and purchase a company car insurance policy.
If you’re starting from scratch, start your search with our list of best car insurance companies.