Your small business may need auto insurance whether or not you have employees driving for you. Commercial auto insurance protects you from unexpected car repairs and liability after an accident —with more coverage than your personal car insurance.
How much is small business auto insurance?
The average annual cost of car insurance for small business owners is between $750 and $1,200 per vehicle. If you own multiple vehicles, you’ll often see a discount on your premiums for covering them all.
Other factors that affect your commercial car insurance policy include:
- Industry. Some businesses carry more risk to than others.
- Location. Expect to pay more in a large city than when driving in a rural area. The cost also depends on the average for your area.
- Vehicles. Your car’s size, year, make, model and use can influence cost. For example, an older car used occasionally will likely cost less to insure than a new car used to transport goods daily.
- Driving history. If you’ve had multiple accidents or ticket violations, it could increase your insurance rates. Many insurers consider the past three years of your driving history.
- Coverage. Your insurance premium can go up if you choose more widespread coverage or a lower deductible.
Compare small business auto insurance quotes
What auto insurance coverage does my small business need?
Many states require that you purchase at least liability insurance for your business. Others also require you to have uninsured or underinsured motorists and medical payments coverage.
You can choose basic protection like liability coverage or add extra protection with collision and comprehensive.
- Liability. Pays for bodily injuries or property damages that result from an accident for which you or an employee is responsible.
- Uninsured or underinsured motorists. Pays for damages even if you’re hit by a driver who doesn’t have enough insurance.
- Medical payments or personal injury. Pays for medical bills not covered by your or your employee’s health insurance.
- Collision. Pays for damages to your business vehicle if you hit someone else or your vehicle rolls over.
- Comprehensive. Insures you against damages not caused by a collision, like theft, natural disasters or hitting a deer.
How much liability insurance do I need for my small business?
Consider getting wide liability coverage with at least a $500,000 limit, as recommended by the Insurance Information Institute. Even small businesses can face steep liability costs if the other driver in a car accident decides to sue.
What add-on coverage should I consider?
You’ll find many coverage options that aren’t required but could benefit your business:
- Rideshare insurance. Some insurers provide specific coverage for drivers of Uber, Lyft and similar services. This option may cost less for your business.
- Trailer coverage. If your business tows or transports goods, you may need to insure your trailers and the goods you’re carrying.
- Hired auto. Pay for damages to a leased or rented business vehicle.
- Nonowner. Cover liability for your employees if they drive their own cars for your business.
- New vehicle replacement. Replace your business vehicle and receive what you owe on a loan or lease that’s above the car’s actual value.
- Auto loan or lease gap coverage. Cover amounts you still owe on a loan or lease if your car is totaled or declared a loss.
- Roadside assistance. Get roadside repairs and cover towing expenses. Many companies also include a discounted repair shop network.
- Rental reimbursement. Cover the cost of a rental car when your business vehicle is in the shop.
Which small businesses need car insurance?
Your business may need commercial car insurance if you transport passengers, deliver goods or carry equipment. You should also consider a commercial policy if employees drive your car or their own car for business use.
Many insurance companies offer industry-specific coverage.
- Delivery services
- Snow removal
- Towing companies
- Wholesale businesses
- Rideshare drivers
Small businesses of all sizes might find that a commercial policy provides helpful protection. Your needs will depend largely on your industry and how you use your vehicle.
Compare your options for a commercial car insurance policy to find the best and most affordable fit for your needs.
Frequently asked questions about small business car insurance
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