Commercial Auto Insurance

Commercial Auto Insurance

Whether your business has a single utility van or a fleet of trucks, you need a customized commercial auto insurance policy based on your unique needs.

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Claims Examples

Coverage

Third-party liability

Problem: You’re driving to a worksite and accidentally rear-end a vehicle in front of you that stops suddenly, causing the driver of the other vehicle to suffer a whiplash neck injury and decides to sue you for pain and suffering.

Outcome: Your third-party liability coverage will pay for the resulting court costs, settlements or expenses if you were at fault for the accident.

Coverage

Collision or upset coverage

Problem: You are driving home from work and are t-boned while driving through an intersection by another driver who ran a red light. Your vehicle is significantly damaged in the accident.

Outcome: If you have optional collision or upset coverage as part of your policy, it will cover the costs associated with repairing your vehicle. How much of the damages it will cover is determined by whether you were fully or partially at-fault, or not at fault.

Coverage

Comprehensive coverage

Problem: You park your vehicle in your driveway. Overnight, a hailstorm erupts, damaging your vehicle’s windshield.

Outcome: If you have optional comprehensive insurance added to your policy, it will cover the cost to repair your windshield, minus a deductible.

Commercial Auto Insurance, Explained.

What is commercial auto insurance?

Commercial auto insurance, also known as commercial vehicle insurance or business auto insurance, provides coverage for vehicles such as cars, trucks, vans, and trailers used for business purposes. Any vehicle that is used to transport materials, tools and equipment, packaged goods or people should have a commercial auto policy.

Why do you need commercial auto insurance?

Independent contractors and small business owners need to safeguard themselves from third-party liability and property damages that may occur when using any vehicle for business purposes. Most personal car insurance policies do not cover accidents or incidents for any vehicle that’s used for business.

What does commercial auto insurance cover?

A standard commercial auto policy in Canada is like the coverages in a personal car insurance policy. For example, a personal car insurance policy includes:

  • Third-party liability: Provides protection if you’re at fault in an accident for injuring or killing someone or damaging their property.
  • Direct compensation-property damage (DCPD): DCPD covers your vehicle, its attached contents (such as the dashboard infotainment system), and the loss of use of your vehicle if you are partially at fault or not-at-fault for an accident. DCPD means you deal with your insurer directly instead of suing the other driver for damages.
  • Accident benefits: If you are injured in an auto accident, accident benefits pay for your medical bills and rehabilitation regardless of whether you are at fault for an accident or not. You have the option of increasing your accident benefits coverage limit. Speak to your broker about what your options are.
  • Uninsured auto: If you’re involved in an accident with an uninsured motorist or an unknown driver who commits a hit-and-run, your uninsured auto coverage will pay for damages to your vehicle.

Are there additional coverages for a commercial auto insurance policy?

There are optional coverages you can add to a commercial auto policy, such as:

  •  Collision or upset coverage: Collision coverage helps pay to repair or replace your vehicle if it’s damaged or a total loss resulting from an accident with another vehicle if you are at fault for the accident. If you don’t have collision coverage in your commercial auto policy, you alone are responsible to pay for damages to your vehicle resulting from a collision.
  • Comprehensive coverage: Despite its name, comprehensive coverage does not mean you’re covered for everything. In auto insurance terms, comprehensive coverage protects your vehicle from damages resulting from a natural disaster, severe weather like hail that damages a windshield, vandalism, and theft.
  • All perils coverage: All perils coverage is a combination of collision and comprehensive coverages. It also covers you for damages if an employee or member of your household steals the vehicle.
  • Specified perils coverage: As its name suggests, specified perils, or named perils, is coverage that protects your vehicle from the perils specifically named in your policy, like theft or weather-related damage such as hail.

How much does commercial auto insurance cost?

The cost of a commercial auto insurance policy involves several factors, including: 

  • Your driving record and years of experience behind the wheel
  • The type of vehicle you drive
  • Your age and gender
  • Where you live or where the vehicle is typically parked
  • How many kilometres you drive annually

 Different insurers offer varying premiums based on these and other factors. That’s why it pays to have a broker shop around on your behalf and find you a policy that suits your needs at an affordable price.

Are there discounts available for commercial auto insurance?

There may be discounts available for a commercial auto insurance policy if: 

  • You are claims-free and have a clean driving record
  • You have more than one business insurance policy with the same insurer

You may be able to save up to 15% or more on a commercial auto insurance policy. Talk to your broker about your eligibility and what actions you can take to help lower your annual premium. For example, if you have five or more company vehicles, ask about a commercial fleet insurance policy, since it is typically cheaper than purchasing individual commercial auto policies for each vehicle you have.

Frequently asked questions

Is a pickup truck considered a commercial vehicle?

In general, most provinces consider pickup trucks to be commercial motor vehicles if they are used for commercial or business purposes. However, check with your provincial transportation ministry to determine if your pickup truck is classified as a commercial vehicle.

If I use my personal vehicle for work and get into an accident, will my personal car insurance policy pay for damages?

Not necessarily. If the insurer for your existing personal auto policy is unaware you are using your private vehicle for business purposes, they could deny any claim you file. That means you will be on your own to cover the cost of repairing or replacing your vehicle. Furthermore, your personal auto policy could be cancelled by the insurer for not notifying them you use your vehicle for work. If an insurer cancels your personal auto policy, it will cause your premium to rise significantly.

Are my tools covered under my commercial auto policy?

You may require an enhancement to your policy to protect your tools and equipment. Tools and equipment coverage is designed to replace, or repair lost or damaged equipment and tools, accessories. Anything valued at less than $1,500 is considered a tool, whereas anything above is considered equipment.

Other business insurance coverage options to consider:

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