Business vs Personal Auto Insurance—and Tips for Saving Money on Both by @rebeccacclark

by Rebecca Clark

What started out as your small, online shop has started picking up steam. You’re expanding your customer base, hiring more employees, and getting ready to open up a storefront shop. You’re even adding a delivery service, which poses a question crucial to protecting you, your employees, and your business: how can you make sure you’re covered in the case of an automobile accident?

You have two (1) options: business auto insurance or personal auto insurance.

Business car insurance typically is used for covering employees whose job requirements include driving (especially long distances) to work with customers or clients. Some of these positions could include pizza delivery drivers, construction workers, or people who drive for rideshare companies.

Personal car insurance covers individual drivers of individual vehicles. If the only time you use your car for business purposes is picking up coffee for your co-workers in the morning or driving to lunch to meet with a key customer once a month, business car insurance may not be necessary.

Both types of car insurance are meant to protect drivers in the case of an accident that causes bodily injury or property damage; however, business vehicles post a greater risk to insurers than personal automobiles. Here is some more information about each type of insurance:

Business Auto Insurance


  • Will free up resources by not requiring an internal employee to manage multiple insurance policies
  • Comprehensive coverage for every employee


  • More expensive
  • Increased liability

How to Save:

  • Form a partnership. See if you can work out a discount between you and your insurer by referring your customers to your insurer.
  • Pay on time. Pay your full premium on time through your insurer’s preferred payment method.
  • Encourage safe driving. Hire employees with good driving records and invest in automobile safety (2) classes or refresher courses.

Personal Auto Insurance


  • Personalized plans for each employee
  • Cheaper


  • Riskier for the company
  • Will need to manage policies internally

How to Save:

  • First, learn about the factors that dictate your car insurance rates. Then shop around and compare car insurance policies (3) from multiple providers.
  • Consider your vehicle. An older-model mini-van is going to be cheaper to insure than the newest Porsche or Ferrari.
  • Raise your deductible (4). This will help lower premium costs.

Whether you decide to cover your employees using an umbrella business insurance or have your employees’ personal insurances cover them, having adequate car insurance is crucial to protecting this business you’ve built from the ground up. Consider the pros and cons to each type of insurance, consult with a professional, and watch your business grow all while keeping you and your employees safe. Best of luck!


Rebecca Clark graduated from Miami University with degrees in English literature and professional writing with a minor in creative writing. She works as an editor for a technical manual development company in Dayton, Ohio, and does freelance writing as well.

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