If you’re a contractor in Michigan, your business depends on your vehicles every single day. Whether you run a single work truck, a few vans, or a full fleet, having the right commercial auto insurance isn’t optional—it’s essential to protecting your business, your employees, and your financial future.
Many contractors assume their personal auto policy will cover them when they use their vehicle for work. But that assumption can lead to major coverage gaps. If you or an employee get into an accident while driving for business, your personal insurer can deny the claim—and your business could be left paying out of pocket.
This guide breaks down everything you need to know about choosing the best commercial auto insurance for contractors in Michigan.
Why Contractors Need a True Commercial Auto Policy
A commercial auto policy is designed specifically for business use. It provides liability protection, medical coverage, physical damage coverage, and the endorsements contractors need to operate safely.
A personal auto policy does
not protect you if the vehicle is used for business purposes such as:
- Driving to job sites
- Transporting tools or materials
- Pulling trailers
- Employee use
- Delivering equipment
- Hauling debris
If an accident happens during business use and you’re on a personal policy, coverage can be denied.
Key Coverages Every Contractor Should Have
1. Liability Coverage (Start With $1 Million Combined Single Limit)
As a contractor, liability is one of your biggest exposures. If you or an employee injures someone or damages property while driving, liability coverage pays for injuries, legal defense costs, and settlements.
Most contractors benefit from
at least $1,000,000 CSL, and many go higher depending on the size of the fleet and contract requirements.
2. Unlimited PIP Coverage in Michigan
Michigan is a no-fault state, and
Personal Injury Protection (PIP) covers medical expenses after an auto accident.
Contractors should strongly consider
Unlimited PIP, because:
- It covers medical bills for yourself and passengers
- It prevents massive out-of-pocket exposure
- Commercial businesses face higher accident risks due to daily driving
Skipping unlimited PIP to save money can backfire quickly.
3. Uninsured & Underinsured Motorist Coverage
Roughly one in four Michigan drivers has no insurance. If you or an employee is hit by someone with no coverage—or not enough—this coverage steps in to pay for:
- Medical expenses
- Lost wages
- Pain and suffering
- Even some legal costs
It is one of the most important protections for contractors, even though it’s technically optional.
4. Comprehensive & Collision Coverage (Especially if You Have Loans or Leases)
If you finance or lease your vehicles, you will be required to carry “full coverage.” Even if you own your vehicles outright, comprehensive and collision coverage protect you from:
- Theft
- Fire
- Vandalism
- Tree damage
- Collisions
- Animal strikes
Repairing or replacing a work truck can be expensive—especially if it has custom utility boxes or equipment.
5. Hired & Non-Owned Auto Coverage (HNOA)
One of the most overlooked coverages for contractors.
HNOA protects your business when:
- An employee drives their personal vehicle for work
- You rent a truck, van, or trailer
- You borrow a vehicle for a job
If an accident happens in a personal or rented vehicle, your business can still be sued. HNOA steps in to protect you.
6. Adding All Employees Who Drive for the Business
Contractors often let employees hop between vehicles or take trucks to job sites. That flexibility creates an insurance exposure.
You should list:
- All full-time drivers
- Part-time drivers
- Jobsite supervisors who drive occasionally
- Owners and partners
- New hires (added immediately)
Failing to list a driver can lead to denied claims and major problems during a lawsuit.
7. Scheduled Trailers and Equipment
Trailers are not automatically covered on commercial auto policies. If you tow:
- Enclosed tool trailers
- Utility trailers
- Dump trailers
- Equipment trailers
Make sure they're scheduled on the policy to avoid gaps.
Risk-Reduction That Helps Lower Your Premium
Contractors can benefit from additional safety measures that carriers reward:
Fleet Management & Vehicle Tracking
Carriers may offer discounts if you use:
- GPS location tracking
- Speed monitoring
- Driver performance dashboards
This improves safety and reduces claims.
Telematics Programs
Telematics monitors braking, acceleration, and driving habits. Safer performance can earn substantial discounts.
Distracted Driving Policies
Clear written rules for phone use can help reduce accidents and demonstrate risk discipline to your carrier.
Final Thoughts: Choosing the Best Commercial Auto Insurance for Contractors
Commercial auto insurance is one of the most important coverages for contractors in Michigan. The right policy protects your business from lawsuits, medical bills, and costly accidents—and ensures your team can confidently get to each job site.
If it's been a while since you reviewed your coverage, or if you're unsure whether your current policy fully protects your business, it’s worth taking the time to get a professional review.
Need Help Reviewing Your Commercial Auto Insurance?
We help contractors across Michigan make sure they’re properly covered and not overpaying.
If you’d like a breakdown of your current policy or a competitive quote:
Contact us today for a free review.
