A personal auto policy covers personal use of a vehicle. Most policies define business use broadly enough to exclude claims that occur while the vehicle is being used for commercial purposes - which includes deliveries, client visits, hauling business equipment, and driving on behalf of an employer.
The Business Use Exclusion
The exclusion typically applies even if the business use is occasional. An insurance company investigating a claim will look at how the vehicle was being used at the time of the accident. If it was business use, the personal policy can deny the claim.
What Commercial Auto Actually Covers
Commercial auto coverage is designed for vehicles used in business. It covers the same types of events - liability, collision, comprehensive - but with underwriting that accounts for business use patterns, higher mileage, heavier loads, and multiple drivers.
Hired and Non-Owned Auto
Hired and non-owned auto coverage fills a specific gap: it covers the business's liability when employees drive rented vehicles or their personal vehicles on behalf of the company. If an employee runs an errand in their own car and causes an accident, the business can be named in the lawsuit even if it's not the vehicle owner.
If your team uses personal vehicles for work, this coverage is inexpensive relative to the exposure. The NC Department of Insurance outlines the distinction between personal and commercial auto coverage for North Carolina employers. Explore commercial auto insurance options or contact IronHaven for a business auto review in Wake Forest, North Carolina.
