Five Important Things You Need to Understand About Car Insurance for Your Business

Getting car insurance is important because it protects you against financial loss resulting from an accident caused by your vehicle. And, the right kind of car insurance can save you money.

As a small business owner, you’re likely doing everything you can to stay in business. You might even be willing to pay more money for insurance, but it’s not always clear what you need or how to calculate the best price. So let’s break down the important things of your auto insurance policy for your business.

Business car insurance policies are for commercial vehicles. If you’re looking to get auto insurance for your business, here are five important things you need to understand.

What Is the Definition of a Business Car?

In order for your car to be classified as a business car, it must be used for work purposes. That includes traveling to different locations for work reasons.

In addition to cars, business vehicles include vans, trucks, and other vehicles.

Cars that you own and cars that you lease are both eligible for business car insurance policies.

Bear in mind that business vehicles don’t include ones that are simply used to regularly commute to a single location.

When Do You Need Car Insurance for Your Business?

If you own or lease a car for business purposes, you need car insurance.

You could use cars for deliveries or rideshares, in which case high mileage would be involved, which increases the risk of accidents and damage, or you could use your car to travel to different offices and other locations as part of your work.

Even if you simply use a company car to make regular trips to the bank or to training courses, it’s wise to get auto insurance.

What Types of Car Insurance Are There?

Like personal car insurance, business car insurance is actually an umbrella term for various types of insurance coverage under one policy.

You’ll definitely want to have coverage for liability and property damage in case your business cars are involved in accidents or are stolen or damaged. But there are other types of coverage that you’ll want to consider.

Once you know what coverage you want, you can use a comparison site like to find car insurance quotes that are tailored to your needs and get the best value deal.

Other types of coverage you’ll want to consider include:

  • Collision Coverage. This compensates you for any damage to your cars caused by road accidents or hitting stationary objects.
  • Comprehensive Coverage. This covers damage to your cars caused by events that are out of the drivers’ control. That includes damage caused by things like vandalism, natural disasters, falling objects, and theft.
  • Liability Coverage. This compensates for any injuries that are sustained by other drivers and damage to another person’s property. So, if you have a driver who causes an accident that results in injuries or damage, your liability coverage will help to pay for the claim.

Is Business Car Insurance Costlier Than Personal Car Insurance?

Commercial cars are typically driven for longer periods in comparison to personal vehicles. The increased frequency of use means there’s a greater risk of the cars being involved in an accident or sustaining damage.

Therefore, business car insurance will most likely have higher limits than personal vehicles.

The exact cost of your business car insurance will depend on factors like:

  • Your policy deductible.
  • Your policy limits.
  • Your driving record or the driving records of your employees who are driving your company cars.
  • The number of cars you use.
  • The types of vehicles you use and their value.
  • Your level of risk.
  • Your insurance claims history.

What Information Do You Need to Obtain a Quote?

It’s best to know what information you’ll need to provide an insurance company with to get an accurate quote.

So, before contacting a potential insurer, gather information like:

  • The estimated annual mileage.
  • The car’s registration number.
  • Your occupation and job title.
  • Any claims that you have had within the last five years.
  • The details of all drivers who you wish to be on the policy.
Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan