The difference between personal automobiles and business automobiles is the name under which the vehicle is titled.
If you use your personal automobile for business purposes, the business should carry hired and non-owned automobile coverage to protect the business' liability for your driving.
If the business owns the car, you should either maintain a personal automobile policy or have a "drive other cars" endorsement on the business policy to cover your liability when driving a company vehicle. The car owner and the driver are often both named in a lawsuit.
So, what's the difference between commercial automobile and business automobile coverage? Commercial automobile coverage includes several policy forms: garage, business auto, and motor carrier are each forms of commercial auto.
For an overview of commercial auto options, see Understanding Commercial Auto Insurance.
Business automobiles can include cars, pickups, small trucks, large trucks, dump trucks and even ambulances when they are owned and regularly used by a business. Business auto forms address standard usage and fleets of vehicles that the business owns.
Garage forms are used by public repair shops, dealerships, attended parking lots, and any business where the general public may drive the business vehicle or the business has care, custody, or control of other people's vehicles. The exposure differs from a standard business auto because owners and drivers are typically not from the same organization, and garage liability often includes towing coverage.
The garage form anticipates that the vehicle owner and operator will frequently be different people as part of normal operations.
Motor carrier forms anticipate different ownership of either the power unit or the trailer it hauls, a common situation in long-haul trucking where independent contractor "owner-operators" hook to other businesses' trailers.
Motor carrier coverage is designed to address the nuances of the independent-operator system and the higher exposures of long-haul trucking compared with a salesperson's vehicle.
If you are comparing policy structures or whether to include auto coverage in a business owners policy, see BOP vs Standalone Commercial Auto Insurance.
These commercial forms can be confusing; please talk to an agent to make sure you are covered properly. We appreciate your business.
Frequently Asked Questions
How does hired and non-owned auto coverage work?
Hired and non-owned coverage protects a business for liability arising when employees drive personal or rented vehicles for business purposes.
Do I need a "drive other cars" endorsement if I drive a company car?
If the company owns the vehicle, the endorsement or a personal policy can provide liability protection for the employee who drives it; verify with your insurer which option applies.
When should a business use a garage form instead of a business auto form?
A garage form is appropriate when the business regularly allows the public to drive its vehicles or has care, custody, or control of customer vehicles, such as dealerships or repair shops.
What makes motor carrier coverage different?
Motor carrier policies account for exposures from separate ownership of tractors and trailers and the use of independent owner-operators common in long-haul trucking.