What commercial auto insurance covers
Commercial auto, often written on the ISO business auto coverage form, protects a business when its vehicles are involved in an accident. Personal auto policies frequently exclude or limit business use, delivery and vehicles titled to a company, so businesses need their own coverage. A typical policy includes:
- Liability for bodily injury and property damage caused to others, plus defense costs
- Physical damage: collision and comprehensive (fire, theft, hail, vandalism) for your vehicles
- Medical payments or personal injury protection, depending on the state
- Uninsured and underinsured motorist coverage
- Hired and non-owned auto liability for rented vehicles and employees' personal cars used on company business
Covered auto symbols
The business auto form uses numbered symbols to define which vehicles are covered for each coverage. Symbol 1 means any auto; symbol 7 means only specifically described autos; symbol 8 means hired autos; symbol 9 means non-owned autos. Choosing a narrow symbol can leave newly acquired or rented vehicles uninsured, so review symbols whenever your fleet changes.
Legal requirements
Every state sets minimum auto liability limits, and some require personal injury protection or uninsured motorist coverage, so commercial auto is mandatory for vehicles on public roads. Interstate for-hire trucking and bus companies also face federal minimums set by the Federal Motor Carrier Safety Administration (FMCSA):
| Type of carrier | Federal minimum |
|---|---|
| For-hire carriers of general freight | $750,000 |
| Carriers of hazardous materials | $1,000,000 or $5,000,000, depending on the material |
| Passenger carriers, 15 or fewer seats | $1,500,000 |
| Passenger carriers, 16 or more seats | $5,000,000 |
FMCSA reports that the property carrier minimums have not changed since they took effect in 1985. Private carriers hauling their own goods have no federal minimum but must meet state rules. Motor carriers usually need the MCS-90 endorsement, which guarantees payment to the public up to the federal minimum.
What drives the price
Insurers price commercial auto by vehicle type and weight, how the vehicles are used (service, retail delivery, long-haul trucking), radius of operation, garaging location, driver age and motor vehicle records, past claims, limits and deductibles. Telematics and dash cameras may earn credits with some insurers. Our commercial auto calculator provides an indicative estimate.
How to choose
Buy liability limits that reflect your real exposure rather than the legal minimum, and consider an umbrella or excess policy above them. Confirm how the policy treats employees driving their own cars, trailers, equipment mounted on vehicles and cargo; goods in transit are usually insured under a separate cargo or inland marine policy. Put written driver selection and safety rules in place, check motor vehicle records before hiring and at least annually, and list every regular driver with the insurer. If you lease vehicles, the lessor may require specific liability limits and physical damage coverage, and lease gap coverage can pay the difference between the vehicle's value and the remaining balance after a total loss. Businesses whose drivers also work for delivery or rideshare platforms should confirm how those platforms' insurance interacts with their own policy.
How claims work
Drivers should keep insurance cards in each vehicle, call police when required, exchange information, photograph the scene and avoid admitting fault. Report the accident to the insurer immediately; liability claims from injured third parties can arrive long after the crash.
Cross-border and international notes
U.S. commercial auto policies typically apply in the United States and Canada. Driving into Mexico generally requires liability insurance from an insurer authorized in Mexico. Companies with vehicles in other countries buy local compulsory motor insurance there, often coordinated through a multinational fleet program. Polis Re helps you compare insurers and request quotes.
