Understanding Commercial Auto Liability

If a business has employees who need to do any type of driving on behalf of the business—whether they are making deliveries, transporting people to or from a meeting, picking up or dropping off clients at an airport or just running errands for their employer—commercial auto liability insurance is a must-have.

What is Commercial Auto Liability Insurance?

Commercial auto liability insurance, sometimes called business auto liability, helps protect a business from expenses associated with injuries or property damage suffered by others in an accident caused by the business owner or one their employees in an insured commercial vehicle. Commercial auto liability insurance can cover any type of commercial vehicles, including cars, SUVs, vans and trucks.

Who Needs Commercial Auto Liability Insurance?

Any business whose owner(s) or employees use company-owned vehicles for business purposes should carry commercial auto liability insurance. Some common activities done with company vehicles that can be covered under commercial auto liability include but are not limited to:

  • Transportation of medical equipment.
  • Transportation of goods across state lines.
  • Delivering goods or documents to other businesses.
  • Delivering goods or services to clients or customers.
  • Transportation of other employees or clients to work-related activities.
  • Picking up food or office supplies from an off-site location.

What Does Commercial Auto Liability Insurance Cover?

Commercial auto liability insurance covers a variety of vehicles and situations. Agents should listen to a business’s needs in order to help them create a customized and comprehensive coverage plan. Typical commercial auto liability insurance can include:

  • Bodily injury liability
  • Property damage liability
  • Personal injury coverage
  • Collision coverage
  • Comprehensive coverage for costs outside of collision
  • Medical expense coverage
  • Uninsured and underinsured motorist protection
  • Rental coverage if a loaner is needed while the insured vehicle is being repaired after a loss

What Does Commercial Auto Liability Insurance Exclude?

Like any other insurance policy, commercial auto liability insurance comes with a number of exclusions. Some are covered under other policies, so there is no need for double coverage, and others are just too high of a risk for insurers. Here are four common scenarios that are not covered by commercial auto liability insurance:

  • Workers’ Compensation, short-term or long-term disability benefits. If an employee were to be injured while driving or riding in a company vehicle, benefits paid to them would need to be done through the company’s workers’ compensation policy or disability benefits rather than auto liability.
  • Expected or intended injury. Any intentionally-caused injury or damage to a third party would not be covered under commercial auto liability. For example, if the insured driver caused an accident due to road rage, it would be excluded from coverage.
  • Employer’s liability. Claims against the employer by employees injured in a company vehicle would need be covered by employers liability coverage.
  • Non-Owned or hired auto liability. Bodily injury or property damage caused by a rented, borrowed or other non-owned vehicle would not be covered by commercial auto liability. However, non-owned and hired auto liability coverage can be added to a general liability policy if needed.


About American Team Managers Insurance Services

Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (714) 414-1200 to speak to a representative.

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