Thursday, 21 May 2015

The difference between Commercial versus Business use for your vehicle

Alberta car insurance policies can be a bit of a grey area when it comes to business versus commercial use. The best way to know what you need coverage for is to call your insurance provider and ask the right questions. That last thing you want is to be denied an insurance claim because you were not covered properly. This can and does happen.

What is business use?

Business use is basically one step further from a regular work commute that most Alberta drivers have on their existing policy. You would still technically have your personal auto insurance policy, but instead of commute kilometers, you would be rated for annual business kilometers. The following list would put you under the business category instead of work commute use only.

  • Sales representative: door to door sales with samples only, no goods for compensation, to be carried in the vehicle.
    •  Ex: Avon representative, interior designer, beauty consultant, etc.

  • Driving to different locations every day rather than one work address:
    • Ex: Music teacher, therapist, consultant, health care provider, architect, claims adjuster etc, (no instruments or goods in vehicle).

What is commercial use?

If you are using your vehicle for the below mentioned purposes, you would need a commercial auto policy, instead of personal auto policy as the purpose of the vehicle, and the nature of the work involved, would be categorized as a commercial risk.

  • Carrying tools and equipment for work purposes
    • Ex: Welder, surveyor, engineer, geophysicist
  • Carrying goods for compensation:
    •   Ex: Pizza delivery, door to door sales (Cutco, etc.).
  • Taxi or tour vehicle

  • Driving on leased lands:
    • Ex: Welder, surveyor, engineer, oil fields worker.

This is a rough guide for business versus commercial use. For more information or for a quote on insurance for your vehicle, contact us today. We have team of brokers who specialize in business and commercial auto insurance.


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  2. Personally, I found this article helpful and informative. While it's not the actual subject I was searching for (I was curious when and if you should hyphenate 'business use'), this article taught me about something I was unaware before.

    Thank you for your blog.

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