What Is Commercial Auto Insurance in Canada?

Most personal car insurance policies in Canada do not provide coverage for accidents or incidents that may occur to a vehicle used for business.

If your business has five or more vehicles, you may require a commercial fleet vehicle insurance policy to ensure you’re covered.

What Coverages Are Included in a Commercial Auto Policy?

Like personal policies, commercial auto insurance policies in Canada must include mandatory provincial coverages such as third-party liability, accident benefits, and direct compensation-property damage.

These statutory coverages and the coverage limits may vary depending on your jurisdiction:

Third-party liability

Third-party liability provides financial support if you are responsible or at fault for an accident resulting in property damage, personal injuries, or death to another person.

It will pay for the other driver’s medical costs, vehicle repairs, and property damage. It will also cover any legal expenses you face from a lawsuit. Most provinces require you to carry a minimum of $200,000 of third-party liability coverage.

But it’s wise to increase that limit since the cost of another person’s medical bills can easily exceed the minimum. If you are sued for the accident, it is likely to surpass the minimum coverage required by your province.

Accident benefits

Accident benefits typically feature four types of coverage:

1. Income replacement, non-earner, and caregiver benefits. Income replacement applies if you are unable to work because of your injuries.
   
   You may claim up to 70% of your gross income. Non-earner benefits come into play if you don’t qualify for income replacement and may compensate you with $185 per week. Caregiver benefits are triggered if you cannot care for a dependent such as a child, because of a catastrophic injury.
2. Medical rehabilitation and attendant care benefits. Medical and rehabilitation benefits apply for your medical expenses not covered by your provincial health care plan.
   
   Attendant care benefits pay to hire someone to care for you at home or in a medical facility if you require assistance to dress, bathe, and use the bathroom. Usually, this coverage is capped at $65,000 for non-catastrophic injuries and $1 million for catastrophic injuries.
3. Death and funeral benefits. Commercial auto accident death and funeral benefits provide financial support.
   
   Your spouse may receive up to $25,000 if you’re fatally injured in a work-related vehicle accident, and each of your dependents or children up to $10,000. Another $6,000 is allotted to pay for your funeral expenses.
4. Miscellaneous benefits. Statutory accident benefits also include coverage for miscellaneous expenses, including lost educational expenses if you’re a student, damage to your clothing, prescription eyewear, and other medical devices.
   
   It also provides for the cost of medical examinations and housekeeping if you need to hire someone to help maintain the upkeep of your home because of your injuries.
   
   Additionally, it covers any expenses incurred by family members who lived with you at the time of the collision and who visited you while recovering. You do have the option to increase the limits within your accident benefits coverages. However, be advised increasing your coverage limits also increases the cost of your annual premium.

Uninsured auto

Uninsured automobile coverage is essential in Canada – even though all drivers are legally required to carry insurance, accidents with uninsured drivers still happen.

If you are involved in a collision with an uninsured motorist deemed to be at fault for the crash, an unidentified motorist, or a driver who commits a hit-and-run, uninsured automobile insurance will pay for damages to your vehicle, your injuries, or if you are killed.

Direct compensation-property damage (DCPD) 

DCPD allows you to claim directly from your insurer if your commercial vehicle is damaged in a not-at-fault accident. That means you can directly file a claim to your insurer for compensation.

Consider adding optional commercial auto insurance endorsements to your policy for enhanced protection tailored to your business needs.

Mandatory Commercial Auto Insurance Coverages By Province

Here’s a breakdown of what a standard or basic commercial auto policy includes in Alberta, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island:

Alberta

Mandatory coverages in Alberta include:

• Third-party liability ($200,000 coverage minimum for any single accident)
• Accident benefits
• Direct compensation-property damage

Uninsured auto insurance is not mandatory in Alberta. It is recommended you add the standard endorsement form (SEF) 44 to your policy, which is designed to provide coverage for injuries or deaths resulting from a collision with an uninsured or underinsured driver who’s at fault for the accident.

Alternatively, compensation for bodily injuries you suffer because of a collision with an uninsured driver who’s at fault for the accident or a hit-and-run incident may be available through Alberta’s Motor Vehicle Accident Claims program.

Ontario

Mandatory coverages in Ontario include:

• Third-party liability ($200,000 coverage minimum for any single accident)
• Accident benefits
• Direct compensation-property damage
• Uninsured auto

New Brunswick

Mandatory coverages in New Brunswick include:

• Third-party liability ($200,000 coverage minimum for any single accident)
• Accident benefits
• Direct compensation-property damage
• Uninsured auto

Nova Scotia

Mandatory coverages in Nova Scotia include:

• Third-party liability ($500,000 coverage minimum for any single accident)
• Accident benefits
• Direct compensation-property damage
• Uninsured auto

Newfoundland and Labrador

Mandatory coverages in Newfoundland and Labrador include:

• Third-party liability ($200,000 coverage minimum for any single accident)
• Accident benefits
• Direct compensation-property damage
• Uninsured auto

Prince Edward Island

Mandatory coverages on P.E.I. include:

• Third-party liability ($200,000 coverage minimum for any single accident)
• Accident benefits
• Direct compensation-property damage
• Uninsured auto

Other provinces, including British Columbia, Manitoba, and Saskatchewan, feature government-run, public auto insurance regimes. Quebec has a hybrid auto insurance system. 

Zensurance does not provide commercial auto or fleet vehicle insurance in these provinces or in the Northwest Territories, Yukon, or Nunavut.

Commercial Auto Insurance Optional Coverages

There are optional coverages you may wish to add to your policy to ensure you have comprehensive protection. 

Among the most common optional coverages small business owners add to their commercial auto policies are:

 Collision or upset coverage

Collision insurance covers the cost of damages to your vehicle if you’ve been in an accident with another car or an object, such as a streetlight.

It pays to repair or replace your vehicle (if it’s a total loss) minus a deductible. Without collision coverage, you alone are responsible for paying to repair or replace your damaged vehicle.

Comprehensive coverage

Comprehensive coverage pays for damages or losses resulting from natural disasters and severe weather, fire damage or explosions, vandalism and theft, falling objects, and damage from a collision or impact with animals minus a deductible.

 All perils coverage

All perils insurance is a combination of collision and comprehensive coverages. It also includes coverage for damage or loss to your vehicle if it’s stolen by one of your employees or someone who lives with you.

Employers’ Hired and Non-Owned Auto Liability

Hired and non-owned commercial auto insurance for businesses covers damages to rented or employee-owned vehicles used for business operations, a must-have for companies with mobile teams.

How to Get a Commercial Auto Insurance Policy in Canada

Zensurance is Canada’s leading business insurance provider helping more than 350,000 small business owners and self-employed professionals across industries get low-cost comprehensive protection, including commercial auto insurance.

Fill out our online application for a free quote in just a few minutes.

Let our team of experienced, licensed brokers get the policy your business needs, customize it to suit your budget and requirements, and answer your questions before you hit the road.

– Updated July 7, 2025.