Commercial Auto Insurance For Contractors In Michigan: Coverage, Costs & What to Know

Commercial Auto Insurance For Contractors In Michigan: Coverage, Costs & What to Know

If you’re a contractor in Michigan—whether plumbing, HVAC, electrical landscaping, or general construction—your business likely depends on trucks, vans, or service vehicles. Protecting those vehicles isn’t just a matter of compliance; it’s essential to keeping your business running smoothly. Commercial auto insurance for contractors in Michigan provides the financial protection you need if an accident, theft, or damage occurs.

In this article, we’ll cover the key things you should know before choosing a policy.

Why Commercial Auto Insurance Matters for Contractors

Contractors face unique risks on the road. From employees going between job sites to hauling materials and equipment, accidents can happen anytime. Without the right coverage, one serious crash could result in thousands of dollars in repair bills, lawsuits, or medical costs—not to mention lost productivity if your vehicles are down.

Key Coverages to Include in Your Policy

1. Liability Limits

Start with strong liability coverage. A good benchmark for contractors is at least $1 million in combined single limit (CSL) liability coverage. This protects you if your business vehicle is involved in an accident that causes bodily injury or property damage.

It’s also smart to match that limit on your uninsured & underinsured motorist coverage, which steps in if the other driver doesn’t have enough insurance.

2. Personal Injury Protection (PIP)

Since Michigan is a no-fault state, Unlimited Personal Injury Protection (PIP) coverage is essential—even on a commercial auto policy. PIP helps cover medical expenses, lost wages, and more for you and your employees if injured in a crash.

3. Physical Damage Coverage

Don’t overlook coverage for the vehicles themselves. This includes:

• Collision coverage – repairs or replacement if your vehicle is damaged in an accident.
• Comprehensive coverage – protection from theft, fire, vandalism, or weather damage.

If you lease or finance your vehicles, physical damage coverage is usually required. Even if not, it’s often worth it to protect your investment.

4. Who’s Covered to Drive

If employees use your vehicles, make sure they’re listed drivers on your policy. Gaps in driver coverage can cause claim issues if someone gets into an accident while on the job.

5. Contractor-Specific Add-Ons

Contractors often need additional protections beyond the basics, such as:

• Coverage for permanently installed equipment or enhancements on your trucks or trailers.
• Hired & Non-Owned Auto coverage, which protects your business when employees use their personal vehicles for a work errand or when renting a vehicle.

These add-ons are small investments that can save you from big losses.

Factors That Impact Cost

The cost of commercial auto insurance for contractors in Michigan varies based on several factors:

• Type of vehicles (pickup trucks vs. cargo vans vs. larger vehicles like dump trucks)
• Number of vehicles/fleet size
• How vehicles are used (hauling materials, transporting employees, etc.)
• Driving history of listed drivers
• Claims history

Premiums can range widely, but contractors often pay anywhere from $2,000 to $15,000 per vehicle annually, depending on these risk factors.

Final Thoughts

A well-built commercial auto policy gives contractors in Michigan peace of mind that their vehicles, employees, and business are protected. By focusing on enough liability coverage, having Unlimited PIP coverage, physical damage protection, and contractor-specific endorsements, you can ensure your business is protected from the unexpected.

📞 Need help reviewing your commercial auto policy? Contact us today to make sure your business has the right protection in place.