Does my business need a business auto insurance policy (BAP)?

A business needs to purchase a business auto insurance policy for many reasons. Some of the reasons are self-explanatory, while others are not as obvious.

In this video, I will explain three reasons to purchase a Business Auto Policy or a BAP. These reasons include financial protection, compliance, and employees.

Let me explain!

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The first benefit to consider is financial protection. Business automobile insurance can provide financial security for the company in case of accidents, theft, or damage to company-owned vehicles. The coverage helps protect the business from expenses (paying out-of-pocket) that could be significant, especially in the case of a severe accident.

Let’s review the definition of a business auto policy:

A commercial auto policy that includes auto liability and auto physical damage coverages; other coverages are available by endorsement. Except for auto-related businesses and motor carriers or trucking firms, the business auto policy addresses the needs of most entities concerning auto insurance.

Does a personal auto policy cover my business vehicle?

I will refer to throughout this video: a personal auto policy is not written to cover business use. Prospective clients often tell us that they insure their commercial-use automobiles under a personal auto policy (PAP). I say, proceed with caution! Again, a personal auto policy is not written to cover business use. Not only that, but the need for more availability of limits and endorsements may severely restrict your protection under the PAP. I will talk about this more as we proceed.

Here is a definition of the Personal Auto Policy:

A standard form published by ISO (Insurance Services Office) for insuring PRIVATE-PASSENGER-TYPE autos owned by INDIVIDUALS. The policy may provide a combination of liability, personal injury protection (ISO (Insurance Services Office) published a standard form and physical damage coverages.

Certain insurance companies will cover some business use under the PAP, but I have only heard this about a few insurers. If you use your vehicle for commercial purposes and insure it under the PAP, check with your insurance company ASAP to ensure protection. This could impact your financial security. Now that you understand a PAP’s shortcomings, let’s focus more on the BAP.

Designated symbols are essential when considering your protection under the Business Auto Policy. Several, such as ‘any auto,’ ‘hired autos only,’ and ‘non-owned autos only,’ are available from the BAP. Here is a list of other numeric symbols to keep in mind:

  • Symbol 1 – Any Auto
  • Symbol 2 – Owned Autos Only
  • Symbol 3 – Owned Private Passenger Autos Only
  • Symbol 4 – Owned Autos Other Than Private Passenger Autos Only
  • Symbol 5 – Owned Autos Subject to No-fault
  • Symbol 6 – Owned Autos Subject to A Compulsory Uninsured Motorists Law
  • Symbol 7 – Specifically Described Autos
  • Symbol 8 – Hired Autos Only
  • Symbol 9 – Non-Owned Autos Only

Continue watching for an example of a real-life claim where Symbol 9 saved our client from bankruptcy.


In most states, it is a legal requirement for businesses to have liability insurance for their vehicles. Failing to comply with these regulations can result in significant fines and legal consequences.

In California, for example, the auto insurance limits required for heavy vehicles depend on the vehicle’s weight and intended use. For vehicles weighing more than 10,000 pounds that are used for business purposes, the minimum liability insurance limits are $750,000.

It would help if you also considered the need to meet contractual and insurance requirements through the business auto policy. For example, if you are using your auto on the property of others, you will find the need to provide proof of coverage with higher limits ($1,000,000), Symbol 1, or a combination of Symbols 7, 8, and 9. Similar to Commercial General Liability, you may also find the need to name other parties as additional insured on your business auto liability, and sometimes with primary wording and waiver of subrogation language.

In addition to the liability section of the business auto policy, other available coverage includes uninsured or underinsured motorist bodily injury, uninsured motorist property damage (including the collision deductible waiver), medical payments, comprehensive, and collision. You may also secure insurance for permanently attached equipment which may prove critical if damaged. Complying with requests from lienholders or leasing companies may also play a significant role in your need for business auto insurance (loss payable provisions).


Suppose an employee is driving a company-owned vehicle for business purposes. Commercial automobile insurance can provide the business and the employee coverage during an accident (both first-party and third-party). This can help protect the employee from financial consequences and provide peace of mind for the employee and the company.  

As you know, hiring employees adds liability to a business, and the business auto policy may provide the protection that all companies need. First, you will list all employees that drive your automobiles on the policy. Consider the coverage offered to employees that take vehicles home at night or garage them at locations other than the business location. Also, consider the need for increased levels of liability insurance if the employees are driving heavier vehicles or if employees travel in groups. One accident can erode limits quickly. For this reason, companies must carry $1,000,000 limits of insurance.

But what about those employees that use their autos while working? Business owners often consider the ramifications of employees driving company-owned vehicles but fail to understand the liability arising from non-owned auto usage.

As I mentioned earlier when discussing designated symbols, Symbol 9 (non-owned autos only) is a critical part of the business auto policy.

Here is an example of a claim that came through our agency for a client in the property management business.

Our client owned a property management firm, with one vehicle owned by the business. However, she employed several property managers who used their cars for business.

While working, one of her employees was traveling to visit a property and illegally picked up his phone to send a text message. Traffic had stopped before him, but he didn’t notice as he looked down at his phone. Unfortunately, the driver impacted the back of a stopped vehicle at 60 MPH before he could react. The result was a multi-car accident and four seriously injured parties. The driver’s auto insurance was primary in the accident, but lawsuits were filed against our client (an attorney discovered the driver was working at the time of the accident.) Symbol 9 (non-owned automobile liability) protected our client in the lawsuits. Although the suits exhausted the $1,000,000 limit of insurance, the policy kept our client out of bankruptcy. She spent no out-of-pocket money on legal counsel and indemnification for the injured parties.

How can Fusco, Orsini & Associates help you?

Commercial automobile insurance is necessary for any business that owns or operates vehicles. It provides financial protection, compliance, and added coverage for employees. We highly recommend a business auto policy and have significant knowledge about the coverage available through our agency.

We help our clients navigate the hardening business auto marketplace by providing risk management and loss control tools to keep their history clean and their employees safe.

Feel free to contact us by texting or calling 858-384-1506 or emailing

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