Company cars are valuable business assets. They offer convenience, mobility, and a professional edge, especially for roles like sales, fieldwork, or client-facing meetings. But when a company vehicle is also used for personal errands, family outings, or weekend travel, insurance becomes more complicated.
Many Canadians assume that a regular personal auto insurance policy will suffice. That assumption creates a major financial risk. If you or your employees drive a vehicle for both personal and commercial purposes, you need the correct insurance structure—or risk claim denial.
Here, we will explain how to properly insure a company vehicle for both business and personal use, help you distinguish between policy types, and show what extra coverage may be required in Canada.
Personal auto insurance is designed for non-commercial use: commuting, errands, leisure travel. It does not account for the elevated risks of business use—frequent travel, different locations, transporting goods or equipment, and greater liability exposure.
Driving to multiple job sites or client meetings
Delivering products or materials
Transporting tools or equipment
Picking up inventory
Driving coworkers or staff
If an accident happens while the vehicle is used for business and the proper policy isn’t in place, the insurer may deny the claim, leaving the driver and the business financially exposed.
| Feature | Personal Auto Insurance | Commercial Auto Insurance |
|---|---|---|
| Purpose | Commuting, personal errands, leisure | Business driving, deliveries, transporting goods |
| Coverage Scope | Lower liability, no business coverage | Higher liability, tailored for business risks |
| Drivers Covered | Policyholder and family members | Multiple drivers including employees and contractors |
| Cost | Lower premiums | Higher premiums due to increased risk |
| Policy Add-Ons | Optional endorsements like business use | Commercial use with personal-use endorsement available |
| Claim Risk | Denied if used for business without proper coverage | Covered under all approved business and personal uses |
A dual-use vehicle refers to one that is used for both work-related activities and personal driving. A personal policy—even with a business-use endorsement—does not fully protect you or your company in this case.
Let’s break these down.
This is the foundation of your protection when a vehicle is part of your company’s operations. It offers:
Higher liability limits to cover business-related lawsuits
Protection for business assets, including tools, equipment, and branding
Coverage for multiple drivers—not just the owner
Unlike adding a specific "form," commercial policies are rated based on the percentage of business vs. personal kilometres. You must disclose to your broker that the vehicle is used for personal errands so the policy is rated correctly.
Note: Do not confuse this with OPCF 6A. In Ontario, the OPCF 6A is specifically for "Permission to Carry Passengers for Compensation" (like Uber or a taxi). It is generally not the form used to add standard personal driving to a commercial policy.
If an employee uses their own personal vehicle for work-related tasks, the business needs to take additional precautions.
| Scenario | Insurance Solution |
|---|---|
| Employee drives own car for client visits | Business-use endorsement on their personal policy |
| Employee makes deliveries or pickups | Business-use endorsement or switch to commercial policy |
| Business requires use of personal vehicles | Non-owned auto liability (OPCF 27) on the company policy |
Tip: Always verify that the employee’s name and vehicle details are declared to the insurer.
Step 1: Determine Legal Ownership
Company-owned: Requires a full commercial policy. Ensure all personal drivers (like spouses, if allowed) are named on the policy.
Employee-owned: The employee must notify their insurer of "Business Use." The employer should verify this annually.
Step 2: Track Usage (2025 CRA Update)
The CRA requires a detailed logbook to distinguish business from personal use. This is vital for tax deductions and insurance ratings.
2025 Mileage Rates: The CRA "reasonable" rate is $0.72/km for the first 5,000 km and $0.66/km thereafter.
Logbook Essentials: Date, destination, purpose, and start/end odometer readings for every business trip.
Step 3: Use the Right Endorsements
OPCF 20 (Loss of Use): Covers a rental vehicle while your business car is being repaired.
OPCF 27 (Liability for Non-owned Auto): For individuals to cover physical damage to a rental car they use for business trips.
Cargo/Equipment Floater: Standard auto policies often exclude the contents of the van. You may need an endorsement to protect tools or laptops.
If you or your employee only occasionally use a vehicle for business (e.g., monthly client meetings), a full commercial policy may not be necessary.
Option: Business-use Endorsement on Personal Policy
This is a middle ground between personal and commercial insurance.
| Covers | Does Not Cover |
|---|---|
| Driving to meetings or conferences | Regular deliveries or transporting goods |
| Running occasional business errands | Vehicles used daily for business purposes |
| Low-level business activity | High-risk occupations (e.g., courier services) |
Note: This endorsement is subject to approval by your insurer and is not suitable for frequent business use.
Every business is unique. Whether you’re a self-employed consultant, real estate agent, or manage a small team, a specialized broker can help tailor your policy to fit your real-world use.
A Broker Can Help You:
Avoid policy exclusions and denied claims
Determine if you qualify for endorsements instead of full commercial coverage
Compare rates across insurers
Ensure personal use is not accidentally excluded
Protect both business and personal liabilities
At Begin Insurance, we understand the complexities of insuring a vehicle used for your career or business operations. We offer comprehensive personal car insurance options and we offer dedicated commercial car insurance broker services in Canada. We work with multiple carriers to find tailored solutions for our clients. Our goal is to provide expert guidance and secure the right coverage to ensure you are fully protected on the road, whether you are driving to a client site or running weekend errands.
We can help you get a variety of low-cost commercial auto insurance, such as liability coverage, collision coverage, comprehensive coverage, coverage for owned and leased vehicles, and much more.
Request a free quote to learn more about our commercial car insurance services.
Posted May 29, 2025