Commercial Auto Insurance

A commercial auto policy is built from the same coverage parts as a personal policy. What changes is who the named insured is, how the vehicles are used, who drives them, and the limits the business needs. Each part has its own limit or deductible on the declarations page.

Two things sit outside the auto policy. Tools and stock carried in the van belong on a tools and equipment floater, and customers' goods you carry for a fee are a cargo exposure. Injuries at your premises or job sites fall under commercial general liability.

A personal auto policy is rated for commuting and pleasure driving. Once a vehicle carries tools, makes deliveries, visits clients all day or is owned by a company, the insurer needs to know, because use is a rating and coverage question, not a formality.

Ontario's automobile insurance regulation defines a commercial vehicle as an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation. A plumber's van, a landscaper's pickup and a caterer's cube van all fit that definition, whatever their size.

Misdescribing use is one of the most common reasons an auto claim gets complicated. If the vehicle's job changes mid-term, such as a new delivery contract, tell your broker before the first trip, not at renewal.

Every province sets a minimum third-party liability limit and decides who sells the basic policy. In British Columbia, Saskatchewan and Manitoba, basic coverage comes from a government insurer and private insurers compete for optional and excess coverage. In Alberta, Ontario and the Atlantic provinces, the whole policy is bought from private insurers.

In Ontario, section 251 of the Insurance Act sets the $200,000 floor for any one accident, covering both bodily injury and property damage. That number is a legal minimum, not a recommendation. Under section 192 of the Highway Traffic Act, the owner of a vehicle is liable for the negligence of anyone driving it with the owner's consent. For a business, that means a serious crash by an employee in a company vehicle lands on the company.

Most business owners carry far more than the minimum, and many client contracts and leases specify a limit and ask to be shown on a certificate of insurance. If a contract asks for more auto liability than the primary policy can sensibly carry, an umbrella above the auto and general liability policies is often the efficient answer.

Ontario's Statutory Accident Benefits Schedule changed on July 1, 2026, and the change applies to commercial vehicles as well as private passenger cars. Standard medical, rehabilitation and attendant care benefits remain in every policy. Income replacement, non-earner, caregiver, housekeeping and home maintenance, death and funeral benefits, and several others are now optional and must be offered rather than automatically included. Auto insurance also now pays first for medical and rehabilitation benefits, other than medication, ahead of workplace health plans.

One detail matters more to a business than to a household. Under the amended Schedule, optional benefits apply only to the named insured, the named insured's spouse and dependants, and persons specified in the policy as drivers of the insured automobile. When the named insured is a corporation, the people most likely to need income replacement are your employees, so the driver list on the policy now does real work.

Many businesses that own no vehicles still have an auto exposure. When an employee drives their own car to a client meeting and causes a serious crash, the injured party can sue the employer as well as the driver. Ontario's Insurance Act makes the vehicle owner's policy the first loss insurance and any other motor vehicle liability policy excess only. In plain terms, the employee's personal policy pays first, and the business needs its own non-owned automobile liability to respond above it, or if that policy has lapsed or excludes the use.

Personal endorsements don't close this gap. The standard Ontario OPCF 27 endorsement, which extends a personal policy to other vehicles a person drives or rents, excludes vehicles owned or leased by the insured person's employer, and its extension to other automobiles doesn't apply while the vehicle is carrying paying passengers or making commercial deliveries. Business vehicles and business deliveries need to be insured on purpose.

Rented and leased vehicles add another layer. Ontario caps a vehicle lessor's liability for injury claims at the greater of $1,000,000 and the amount of insurance required by law, so after a serious collision in a rented van, claims above that cap point at the renter and the driver. Arrange rental coverage on the business's own policy, including damage to the rented vehicle, rather than relying on a credit card or the counter waiver.

These three are often confused because they share the same core coverages. The difference is scale and vehicle class, and each changes how the policy is rated and administered.

Our post on fleet policies versus commercial auto covers the point at which moving to a fleet program starts to pay.

Hypothetical. A small engineering firm owns no vehicles. A project coordinator drives her own SUV to a site meeting and rear-ends a stopped car, injuring the other driver, who later sues both her and the firm.

Her personal policy responds first because it is the owner's policy on that vehicle. It carries a $1,000,000 liability limit, and the claim settles above that amount. Without non-owned automobile liability, the firm would fund the remainder and its defence from its own balance sheet. With non-owned liability of $2,000,000, the firm's insurer picks up the excess and the defence of the firm.

Two further points come out of the same facts. If her personal policy had not declared business use, her insurer might have raised it as an issue, which is why the firm should check employees' policies before they drive for work. And her own injuries are handled through her accident benefits, not the firm's auto coverage, unless the firm had insured a company vehicle and listed her as a driver.

Commercial auto premiums are built vehicle by vehicle and driver by driver, then adjusted for the business. Underwriters weigh the same factors on almost every submission. Our post on why commercial auto costs what it costs goes deeper on pricing.

Insurers price this class differently, and appetite varies by trade and vehicle type, which is why comparing several markets matters more here than on most lines. Packaging auto with your liability and property can also help; see bundle and save.

Our claims team works with you and the adjuster from first notice to settlement.