What Is Commercial Auto Insurance? Definition and Coverages (2025)

Key Takeaways

Commercial auto insurance protects business vehicles financially since personal policies exclude work activities.

Your policy typically includes liability, comprehensive, collision and medical coverage, plus additional state-required protections.

Small business owners must carry commercial auto insurance if they use vehicles for business, except in New Hampshire, where they only need financial responsibility.

What is Commercial Auto Insurance?

Commercial auto insurance covers drivers and business vehicles when personal auto insurance doesn't. If you use your vehicle for work like visiting clients, making deliveries or hauling equipment, personal policies leave you exposed since they specifically exclude business activities. Commercial coverage fills this gap with higher liability limits and financial protection for multiple drivers on your policy, though coverage requirements and availability vary by state and insurer.

You can buy business auto insurance as a standalone policy for maximum coverage flexibility or bundle it into a business owner's policy (BOP) with your general liability and property insurance.

Types of Commercial Auto Insurance Coverage

Your commercial auto insurance policy can include different coverage options, and what's required depends on your state:

Liability coverage

Gives you financial protection when you're at fault in an accident and damage someone's property or hurt them. Most states require this coverage, and it pays medical bills, vehicle repairs and legal fees if someone sues you without requiring a deductible.

Comprehensive coverage

Covers damage from theft, vandalism, weather, fire and other non-collision events, though you'll pay your deductible before coverage kicks in. You'll want this if you park work trucks overnight in unsecured areas or operate in storm-prone regions where these risks are higher.

Collision coverage

Pays for damage to your vehicle from crashes, no matter who's at fault. You need this if you're financing or leasing your business vehicles.

Medical payments coverage

Covers medical costs for you and your passengers after an accident, even if you caused it. It comes in handy when employees regularly ride in company vehicles or when you're driving clients around.

Uninsured/underinsured motorist coverage

Protects you when drivers who don't have enough insurance hit you. Uninsured drivers are more common than you'd expect, and you don't want to pay out of pocket for someone else's accident.

Personal injury protection (PIP)

Whether you're at fault or not, it covers medical bills, lost wages and rehabilitation costs. Some states require this, and it covers more than medical payments coverage does.

What Does Commercial Auto Insurance Cover?

Commercial auto insurance covers specific risks related to using vehicles for business purposes. The scenarios below show what you can expect your policy to cover and what it won't.


Your delivery driver hits another car while making a customer delivery.	✅	Your liability coverage handles the other driver's medical costs and car repair expenses because this happened during normal business activities.
Someone steals your work van from a job site overnight.	✅	Comprehensive coverage pays to replace your van and any permanently attached equipment, minus your deductible.
Your employee gets hurt while loading equipment into your truck.	❌	Workers' compensation insurance covers this, not commercial auto. The injury happened outside the vehicle during work activities.
A tree falls on your parked company vehicle during a storm.	✅	Comprehensive coverage handles weather-related damage to your vehicle, whether you're driving or parked.
You're driving to a client meeting and cause an accident.	✅	Your liability coverage kicks in because you were using the vehicle for business purposes, even though you weren't actively working.
Thieves break into your vehicle and steal your laptop and tools.	❌	Commercial auto doesn't cover personal property inside vehicles. You'd need tools and equipment insurance or commercial property coverage for stolen business equipment.
Your company truck breaks down due to mechanical failure.	❌	Routine maintenance and mechanical breakdowns aren't covered. Consider a separate vehicle service contract if this concerns you.
You accidentally backed into a customer's fence while making a delivery.	✅	Liability protection handles damage costs when you harm someone else's property, like hitting a customer's fence during work calls.

How Much Commercial Auto Insurance Do I Need?

You need commercial auto insurance if you haul materials to construction sites, transport catering supplies to events, drive company vehicles between office locations, provide mobile services like pet grooming or appliance repair or use rideshare and delivery apps to earn income. These activities put you at higher risk than typical personal driving, requiring specialized business coverage.

While minimum coverage requirements vary by state, you'll need to figure out how much financial protection makes sense for your specific business situation. Key factors to think about when choosing your coverage levels include:

Your industry's risk exposure

Contractors carrying expensive tools face higher theft risks than consultants with laptops. Food delivery drivers have more frequent accident exposure than photographers who drive to weekend events.

Vehicle type and usage intensity

Pickup trucks hauling heavy equipment need higher liability limits than sedans used for client meetings. Daily delivery routes require more comprehensive protection than occasional business trips.

Employee driving patterns

If employees drive your business vehicles, you're liable for accidents they cause while working. Think about how often they drive company vehicles and their driving records when you're setting coverage limits, since poor driving histories increase your insurance costs.

Driving environment and damage potential

If you drive in high-end areas with expensive vehicles and property, or dense urban areas with multiple cars, accident damages can easily exceed minimum liability limits. Higher coverage protects your business assets from lawsuits when repair costs are steep.

The right coverage amount balances protecting your business with managing premium costs. Most businesses find that stepping up from minimum coverage costs less than you'd expect and provides significantly better financial protection for your assets.

Commercial Auto Insurance Requirements By State

Every state handles commercial auto insurance differently. You might need just $15,000 per person in one state but $50,000 or more in another.

The type of work you do can change your coverage requirements. Businesses using large trucks, hauling hazardous cargo or crossing interstate lines must often carry combined single limit (CSL) coverage. This means you have one dollar amount that covers both injury claims and property damage, rather than splitting coverage into separate categories.

Check what your state requires:

State	Required Coverage and Minimum Limits	Special Requirements
Alabama	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident	Property carriers >10,000 lbs: $300,000-$750,000 depending on cargo type
Alaska	• Bodily injury liability: $50,000 per person/$100,000 per accident • Property damage liability: $25,000 per accident	Passenger carriers: $500,000 BI/$200,000 PD
Arizona	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident	Hazmat carriers: $1M-$5M CSL depending on substance
Arkansas	• Bodily injury liability: $25,000 per person/$50,000 per accident Property damage liability: $25,000 per accident	Property carriers: 50/100/30
California	• Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $15,000 per accident	Interstate vehicles with USDOT/MC: $750,000 CSL minimum
Colorado	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident	Interstate vehicles: $750,000 CSL minimum
Connecticut	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident • Personal injury protection (PIP): $20,000 per person/$40,000 per accident	Passenger vehicles >8 passengers: $1.5M; >16 passengers: $5M
Delaware	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $15,000 per person/$30,000 per accident	Taxicabs: $26,000 BI/$11,000 PD minimum
Florida	• Property damage liability: $10,000 per accident • Personal injury protection (PIP): $10,000	No-fault state Bodily injury liability not required except for DUI convictions and taxis ($125,000/$250,000)
Georgia	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident	Higher limits required for larger vehicles and interstate operations
Hawaii	• Bodily injury liability: $20,000 per person/$40,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $10,000 per person	Property carriers: 250/750/250
Idaho	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident (opt-out available in writing)	Property carriers: $750,000 CSL for non-hazardous materials
Illinois	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	Standard commercial requirements apply
Indiana	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident	Higher limits for commercial carriers
Iowa	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident	Vehicles >10,000 lbs: $750,000 liability for non-hazardous; $5M for hazardous
Kansas	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): - $4,500 medical expenses - $900/month lost wages (12 months) - $4,500 rehabilitation - $25/day essential services - $2,000 funeral expenses	No-fault state requirements apply
Kentucky	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): $10,000 per person per accident	No-fault state requirements apply
Louisiana	• Bodily injury liability: $15,000 per person/$30,000 per accident • Property damage liability: $25,000 per accident	Standard commercial requirements apply
Maine	• Bodily injury liability: $50,000 per person/$100,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $50,000 per person/$100,000 per accident • Medical payments coverage (MedPay): $2,000 per person	Higher baseline requirements
Maryland	• Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $15,000 per accident • Uninsured/underinsured motorist (UM/UIM): $30,000 per person/$60,000 per accident (includes property damage)	Baltimore area taxis: 30/60/15 or $75,000 CSL
Massachusetts	• Bodily injury liability: $20,000 per person/$40,000 per accident • Property damage liability: $5,000 per accident • Personal injury protection (PIP): $8,000 per person • Uninsured/underinsured motorist (UM/UIM): $20,000 per person/$40,000 per accident	No-fault state; UM/UIM required
Michigan	• Bodily injury liability: $50,000 per person/$100,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): Options include unlimited, $500,000, $250,000, $50,000 (Medicaid enrollees), or opt-out (Medicare enrollees)	Freight vehicles >10,000 lbs have higher requirements
Minnesota	• Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $40,000 per person ($20,000 medical, $20,000 wage loss/replacement services)	No-fault state requirements apply
Mississippi	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident	Standard commercial requirements apply
Missouri	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured motorist (UM): $25,000 per person/$50,000 per accident	Standard commercial requirements apply
Montana	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident	Standard commercial requirements apply
Nebraska	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	Standard commercial requirements apply
Nevada	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident	Standard commercial requirements apply
New Hampshire	• Financial responsibility only (insurance not required)	Only state not requiring commercial auto insurance, but financial responsibility required
New Jersey	• Bodily injury liability: $15,000 per person/$30,000 per accident • Property damage liability: $5,000 per accident • Personal injury protection (PIP): $15,000 minimum (up to $250,000 available; automatic expansion to $250,000 for catastrophic injuries)	No-fault state; minimum limits increasing in 2026
New Mexico	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident	Standard commercial requirements apply
New York	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $50,000 • Uninsured motorist (UM): $25,000 per person/$50,000 per accident	No-fault state with additional requirements
North Carolina	• Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $30,000 per person/$60,000 per accident	Vehicles >26,000 lbs: 100/300/50
North Dakota	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): $30,000 per person • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	No-fault state
Ohio	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident	Standard commercial requirements apply
Oklahoma	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident	Standard commercial requirements apply
Oregon	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	Standard commercial requirements apply
Pennsylvania	• Bodily injury liability: $15,000 per person/$30,000 per accident • Property damage liability: $5,000 per accident • Personal injury protection (PIP): $5,000 minimum medical benefits (up to $100,000+ available; optional add-ons for lost wages, funeral expenses)	No-fault state; lower baseline requirements
Rhode Island	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident	Standard commercial requirements apply
South Carolina	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	Standard commercial requirements apply
South Dakota	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	Standard commercial requirements apply
Tennessee	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident	Standard commercial requirements apply
Texas	• Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): $2,500 minimum (automatically included unless waived in writing; higher limits available)	Additional requirements for vehicles with DOT numbers
Utah	• Bodily injury liability: $25,000 per person/$65,000 per accident • Property damage liability: $15,000 per accident • Personal injury protection (PIP): $3,000 minimum - Medical expenses - Lost wages up to $250/week or 85% of income for 52 weeks - Burial costs up to $1,500	No-fault state requirements apply
Vermont	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Uninsured/underinsured motorist (UM/UIM): $50,000 per person/$100,000 per accident	Standard commercial requirements apply
Virginia	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident • Uninsured/underinsured motorist (UM/UIM): $50,000 per person/$100,000 per accident (effective Jan 1, 2025; includes property damage $25,000)	Standard commercial requirements apply
Washington	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident	Freight vehicles have weight-based requirements
West Virginia	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	Passenger vehicles have capacity-based requirements
Wisconsin	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident	Standard commercial requirements apply
Wyoming	• Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident	Standard commercial requirements apply

If you're financing or leasing commercial vehicles, your lender will likely require higher coverage limits and additional financial protections beyond state minimums. Factor these requirements into your coverage decisions when purchasing vehicles.

Commercial Auto Liability Insurance: Bottom Line

Commercial auto insurance fills the gap that personal policies leave when you use vehicles for business. Coverage options include liability, comprehensive, collision and medical protections, with state requirements varying for additional coverages. Nearly all states mandate this insurance for business vehicle use, making it essential for your company's financial security.

Commercial Auto Insurance: FAQ

Small business owners using vehicles for their operations often have questions about commercial auto insurance. We answered the most frequently asked questions:

How much does commercial auto insurance cost?

Costs vary based on your business type, vehicle usage and coverage levels. State minimum requirements differ significantly across the country, but higher coverage limits often provide much better protection for your business assets when accidents happen.

Do I need commercial insurance for a pickup truck?

Yes, if you use your pickup truck for business activities like hauling materials or equipment. Personal policies exclude work-related driving, so you're left without coverage. Pickup trucks need higher liability limits than sedans since they're heavier and can create more costly accidents.

How do I get a quote for commercial auto insurance?

Contact insurers directly or work with independent agents representing multiple companies. You'll need details about your business, vehicles and drivers. You can buy standalone coverage for flexibility or bundle it into a business owner's policy with other insurance types.

What vehicles need commercial auto insurance?

Any vehicle used for business needs commercial coverage, whether hauling materials, transporting supplies, driving between offices, providing mobile services or using rideshare and delivery apps. It applies to pickup trucks, delivery vans, company cars and specialized service vehicles.

Can I use personal auto insurance for business?

No. Personal policies exclude work activities, putting your business at financial risk during work-related driving. Commercial coverage protects against liability claims, vehicle damage and medical expenses when accidents happen during activities like client visits or deliveries.

What's the difference between liability-only and full coverage commercial auto insurance?

Liability-only covers damages you cause to others, but not your vehicle. Full coverage adds comprehensive and collision protection for your vehicles, plus medical payments. Lenders require comprehensive and collision coverage for financed or leased vehicles.

Do all states require commercial auto insurance?

Nearly all states require commercial auto insurance, with minimum liability limits varying significantly by state. New Hampshire only requires financial responsibility. Many states have special requirements for larger vehicles or interstate operations.

What does commercial auto insurance not cover?

It doesn't cover employee injuries outside vehicles, personal property stolen from inside or mechanical breakdowns. You'd need separate coverage for stolen business equipment and vehicle service contracts for mechanical failures.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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What is Commercial Auto Insurance?

Key Takeaways

What is Commercial Auto Insurance?

Compare Small business Insurance Rates

Types of Commercial Auto Insurance Coverage

Liability coverage

Comprehensive coverage

Collision coverage

Medical payments coverage

Uninsured/underinsured motorist coverage

Personal injury protection (PIP)

What Does Commercial Auto Insurance Cover?

How Much Commercial Auto Insurance Do I Need?

Your industry's risk exposure

Vehicle type and usage intensity

Employee driving patterns

Driving environment and damage potential

Commercial Auto Insurance Requirements By State

Commercial Auto Liability Insurance: Bottom Line

Commercial Auto Insurance: FAQ

How much does commercial auto insurance cost?

Do I need commercial insurance for a pickup truck?

How do I get a quote for commercial auto insurance?

What vehicles need commercial auto insurance?

Can I use personal auto insurance for business?

What's the difference between liability-only and full coverage commercial auto insurance?

Do all states require commercial auto insurance?

What does commercial auto insurance not cover?