Commercial auto covers vehicles used in the business.
Why a personal policy is not enough
Personal auto policies commonly exclude business use. A van carrying tools and materials to a job, driven by an employee, is business use.
The exclusion is discovered at the claim rather than at the renewal, which is what makes it expensive: the vehicle, the liability, and any injury are all uncovered at once.
What it covers
Liability for injury and damage the vehicle causes, which is the part with no ceiling and the reason the policy exists.
Physical damage to the vehicle itself.
Uninsured and underinsured motorist coverage, for being hit by someone with inadequate cover.
Tools and equipment carried are usually not covered by the auto policy. They need coverage of their own — see tools and small equipment.
Employees driving their own vehicles
Where staff run errands or travel between jobs in personal vehicles, the business can be liable for what happens. Hired and non-owned auto coverage addresses this, and it is frequently absent because the business does not think of itself as having a fleet.
Subcontractors
A subcontractor's own commercial auto policy is what protects the business from their driving. A current certificate, checked at renewal rather than collected once, is the control.
Cost
Premium is driven by vehicle type, radius travelled, and driving records. Motor vehicle records reviewed before hiring a driver is the single most effective way to keep it down, and forms part of recruiting for any role that drives.