Personal vs. Business Auto Insurance

For company owners, figuring out the difference between business auto insurance and personal auto insurance can be complicated and confusing. Sometimes small business owners and employees use their personal vehicle for job-related tasks, such as transporting equipment or delivering goods.

Personal auto insurance coverage usually excludes business use, meaning the insured is not covered if they get into an accident while driving for work purposes. So, which policy is the right one to use for multipurpose vehicles? Here’s a better look at the difference between business auto and personal auto insurance.

What does Business auto insurance cover?

The main difference between personal auto insurance coverage and commercial auto insurance coverage is who owns the vehicle itself. If a business owns a vehicle, it must be covered by business auto insurance. Commercial auto insurance covers accidents that happen while a business owner or their employees drive a company car. While both personal and commercial auto policies provide payment for legal and medical bills related to auto accidents, commercial auto insurance typically covers higher claims, various kinds of vehicles, and complex legal problems.

A commercial policy usually insures all the business’s employees as additional insureds, which means every employee with a valid driver’s license can use the business vehicle.


A commercial auto policy typically has higher liability limits than personal insurance. It can cover vehicles used for a variety of reasons, including transporting goods or equipment, diving clients or employees, charging passengers a fee to ride, hauling heavy loads, towing a trailer for business, or performing a service that a company charges for.


If a business owner or their employees use a personal vehicle for work errands, they should consider purchasing hired and non-owned auto insurance. This policy provides liability coverage if someone in the company gets into an accident while driving their personal vehicle for work purposes. It also provides protection when a business rents or leases a vehicle.

What does personal auto insurance cover?

Personal auto insurance only covers accidents that occur while someone is using their vehicle for personal reasons. That includes commuting to and from work and travel that is unrelated to their job duties. Policies usually cover the car owner and one or two immediate family members who live with them.

A personal auto insurance policy will not cover business use, and most personal auto policies specifically exclude business use entirely. If a business owner or one of their employees gets into an accident while driving for work purposes, an insurance provider will likely reject their claim.

Because a personal auto insurance policy includes less coverage, it’s usually less expensive than commercial auto coverage. In some instances, a personal auto policy may include limited coverage for business use. Speak with your trusted insurance agent to determine what coverage type best suits your needs.

About Byrnes Agency

At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

If you’ve enjoyed what you’ve read here and would like to know when we’ve published a new blog post, please “like” us on our Facebook page, and share this with your Connecticut neighbors.

Dayville Office

Phone: (860) 774-8549

394 Lake Rd

Dayville, CT 06241

United States

Hours of Operation: Monday- Friday 9:00am-5:00pm

Norwich Office

Phone: (860) 886-5498

6 Consumers Avenue

Norwich, CT 06360

United States

Hours of Operation: Monday- Friday 9:00am-5:00pm

Tags: , , , ,