Do you use your personal vehicle for business purposes? If you do and get into a collision, will your personal auto policy cover you for damages? Unfortunately, there’s a good chance it may not.

If your small business has a single utility van or several business vehicles in Ontario, you need a commercial auto insurance policy to protect them and your employees. Or, if you occasionally use your personal vehicle to carry tools and equipment to a jobsite, you may need a commercial auto policy.

Also known as commercial vehicle insurance or business auto insurance, commercial auto insurance provides coverage for your company’s vehicles, including cars, vans, and trucks – any vehicle used for business purposes.

Whether your business has one car or up to five vehicles to transport people, materials, or packaged goods, it’s essential to have a customized commercial auto policy to protect you from third-party liability and property damage. Primarily since most personal car insurance policies in Ontario do not provide coverage for accidents or incidents that may occur to a vehicle that’s used for business.

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

About Ontario’s No-Fault Insurance System

Ontario has what’s known as a no-fault insurance system. Despite the name, that doesn’t mean there is no fault assigned to a driver or drivers involved in a collision.

commercial delivery van

Essentially, no-fault insurance in Ontario allows drivers in an accident to both file a claim to their respective insurance companies to cover the cost of damages to their vehicles. Insurance company adjusters who investigate collisions after receiving a claim will allocate fault levels to each driver involved in an accident. Insurers use Ontario’s fault determination rules to determine who is responsible for an accident. You could be found to be not-at-fault, partially at fault, or entirely at fault for an accident. If you are found to be 25% at fault for a collision or more, it’s likely your annual premium will increase at renewal time.

Ontario’s Insurance Act forbids insurers from increasing your premium for minor collisions that incur less than $2,000 worth of damage and with no injuries to anyone (for accidents that occurred in July 2016 or later).

What Coverages Are Included in an Ontario Commercial Auto Policy?

Like a personal auto policy in Ontario, a commercial auto policy includes four mandatory types of coverages that are required by law in the province:

  • Third-party liability. Third-party liability provides you with financial support if you are responsible or at fault for an accident that results in property damage, personal injuries, or deaths to another person. It will pay for their medical costs, repairs to their vehicle, and damage to their property. It will also provide you with coverage for any legal expenses you face from a lawsuit. As in Ontario, most provinces require you to carry a minimum of $200,000 of third-party liability coverage, but it’s wise to increase that limit to $500,000, $1 million, or $2 million since the cost of another person’s medical bills can easily exceed the minimum amount. If you are sued for the accident, it is likely to surpass the minimum amount of coverage required by the province.
  • Accident benefits. Accident benefits 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 be able to 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 are unable to 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 the Ontario Health Insurance Plan (OHIP). 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. In the unfortunate event you die because of injuries in a car accident, your spouse may receive up to $25,000, and each of your dependents or children, up to $10,000 each. Another $6,000 is allotted to pay for your funeral expenses.
  4. Miscellaneous benefits. Ontario’s 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. It also covers any expenses incurred by family members who lived with you at the time of the collision 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. All drivers in Ontario must be insured to drive legally. However, it is estimated that 2% of all drivers on the road in Canada drive without insurance. 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. It provides a minimum of $200,000 in compensation if the accident occurred in Ontario.
  • Direct compensation-property damage (DCPD). DCPD provides you with compensation if you are hurt, or your vehicle is damaged in an accident that you did not cause. Because you are not at fault for the accident, you can file a claim to your insurance company for compensation directly. To qualify for DCPD compensation, you must not be at fault for the accident. One or more vehicles must be involved in the collision. All the vehicles involved must be identified and insured, and the accident must have happened in Ontario.

There are optional coverages you may wish to add to your policy to ensure you have comprehensive protection. Two of 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 for your vehicle does not mean you’re covered for everything. For example, it 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.

How to Get a Commercial Auto Insurance Policy in Ontario

Get a free quote from Zensurance by filling out our online application (it only takes a few minutes). Feel free to speak to one of our licensed brokers about your commercial auto policy needs. Unlike an insurance agent who works for an insurance company, our brokers work for you. They can answer your questions, recommend the types of coverages you need, and shop more than 50 Canadian insurance companies to find the policy you need at the lowest premium possible.


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