Insuring the Vehicles you use for business purposes in Alberta.

Can I rely on personal auto insurance? 

Professional accountants, insurance agents, real estate agents, and other business owners can be insured for business use under their personal auto insurance policies.  This usually requires that the vehicle is being used for personal transportation only.  Taking clients to see property, going to the bank to make a deposit, attending meetings, or getting to appointments is normally allowed.   

Alberta residents must make sure that they advise their auto insurer that you use their autos for business purposes.   They should answer the appropriate questions on the application to make sure they qualify for coverage under a personal auto policy.  You want to make sure that the policy states that it is being insured as a Class 7 vehicle.  

Some insurance companies require you to have a commercial auto policy if the vehicle being insured is used for business purposes and is a pickup or a van. 

View a copy of an auto insurance applicaiton here.

When do I need a Commercial Auto Policy?

In Alberta, if you are transporting tools, equipment, instruments, stock, customer's goods, or supplies, or have attached machinery related to your business activities you need to have a commercial auto policy.  

Your insurance company will require you complete a commercial vehicle supplement that will be used to determine your classification and premium. 


Risk Management Issues

It is important to make sure you establish what you are required to report to your insurer.   Knowing what is required should you hire an employee that will be driving your vehicle is important.  If you are required to get approvals do so before the employee drives the vehicle. 

• Do you have the vehicle properly registered?  You should provide a copy of the registration to your insurance provider. 
• Is the named insured under the auto policy the same as that indicated on the Registration?
• Is it a requirement that you have employees and/or occasional drivers approved in order to have coverage when they are operating the vehicle?   Establish what the requirements are and report any changes to your broker immediately.   
• If your spouse or children occasionally use this vehicle are they allowed to do so?  

Link to Alberta Registries  Alberta Registries 

Registries Location Search  Search For Registries Office


Minimum Coverage Requirements In Alberta  

Liability                  Required by Law   $200,000
Accident Benefits   Required by Law
Family Protection   Required by Law

Collision                 Not Required By Law 

Comprehensive      Not Required By Law

Building your Commercial Auto Policy

Liability Limit   Choose $1, 2, 3, or 5 Million
Accident Benefits
Family Protection - same as Liability Limit

Permission to Pull Commercial Trailer - each trailer you use for business purposes must be added to the policy regardless of your desire to insure the trailer for physical damage.  Liability Limit will be the same as that on the towing unit.  

Collision            Deductible $500, $1000, $2500 .....

Comprehensive  Deductible $250, $500, $1000 ......

Damage to your vehicle is based on Actual Cash Value. 

ENDORSEMENTS are then applied to the policy.
Endorsements can either address shortfalls in coverage or restrict coverage. Endorsements that need to be signed are restrictive. Anytime you need to sign an endorsement be assured that it is taking coverage away that you would normally be getting under a Automobile policy.

Highlighted are the endorsements most often used.

SEF #2 – Drive Other Automobiles (Named Persons)
This endorsement extends the “drive other cars” provision of the SPF #1, to the listed drivers of a policy issued in the name of a firm or corporation as they would receive if the vehicle was insured in their own name. The endorsement provides Section A coverage for the persons named in the endorsement while personally driving any other non owned private passenger automobile. NOTE: We will read this coverage into our SPF #1 for all drivers listed on the policy who are residing in the same household as the named insured.

SEF #3 – Drive Government Automobiles
Covers the driver from potential liability, as a driver, while operating a government automobile. Governments self insure and coverage does not extend to when the vehicle is used for personal reasons.

SEF #5 – Permission to Rent or Lease
Grants permission to the lessor to rent or lease the described automobile to a specified person (Lessee). Since you do not own the vehicle you need permission to insure it which this endorsement addresses. 

SEF #6a – Permission to Carry Passengers for Compensation
This endorsement provides permission to carry passengers for compensation., or as part of a car pool or other arrangement.

SEF #8 – Property Damage Reimbursement Endorsement
This is a Property Damage deductible endorsement usually used in conjunction with

SEF #8a – Property Damage Reimbursement for Operation by Named Person
Endorsement (Section A only). This is used to exclude coverage for a specific person who may have excess to the vehicle and be living in the same household. This may be required if a person living in the home is suspended from driving or the vehicle owner does not want to pay higher premiums to insure a spouse or child who lives in the home.

SEF #9 – Marine Use Excluded Endorsement (Amphibious Vehicles)
This endorsement excludes coverage while the vehicle is used in or upon water or being launched or landed there from. This is usually applied to snomobiles or ATV's since they are not designed to be used on water but many owners choose to do so at their risk.

SEF #13d – Limited Glass Endorsement
Deletes glass from Comprehensive coverage.

SEF #13H – Section C-Deletion Hail Coverage Endorsement
Usually used if prior damage from hail damage exists unrepaired.

SEF #19 – Limitation of Amount Endorsement
Limits the maximum amount payable on Section C coverage on a vehicle to the appraisal value but does not guarantee this amount or allow for appreciation. This is usually desired by vintage car owners since the depretiated value is far less than the real market value of the vheicle. Teh insurance company would otherwise pay the actual cash value.

SEF #20 – Loss of Use
This endorsement provides coverage for a rental vehicle if the insured vehicle is out of service due to loss from an insured peril covered under the Section C coverage carried by the insured. Endorsement provides for approximately $1,500 (varies) coverage per occurrence with no maximum daily limit.

SEF #25 – Alteration Endorsement
Used to record changes to an SPF #1. This endorsement needs to be signed by the insured.

SEF #27 – Legal Liability for Damage to a Non-Owned Automobile
Extends Section C coverage to include damage to an automobile not owned by or registered in the named insured while it is in the care, custody & control of the insured.

SEF #28 – Reduction of Coverage
This endorsement reduces limits or coverage under the policy while the person named in the endorsement is operating the insured vehicle. This endorsement must be signed by the insured.

SEF #30 – Excluding Operation of Attached Machinery
This endorsement excludes Liability under Section A for the “operations” of attached equipment.

SEF #31 – Non Owned Equipment Endorsement
This endorsement extends Section C coverage to equipment not owned by the insured while it is attached to the insured vehicle.

SEF #32 – Recreational Vehicle Endorsement
This endorsement provides coverage for unlicensed, unqualified or underage drivers while the recreational vehicle is being used off public highways.

SEF #37 – Limitation to Automobile Sound and Electronic Communication Equipment
This endorsement limits to $1,500 for the loss or damage to equipment that is not factory installed, caused by theft or attempted theft.

SEF #38 – Increased Limit, Automobile Sound and Electronic Communication Equipment

SEF #39 – Accident Rating Waiver Endorsement
When is endorsement available?
1) Available only for the following classes: 01, 02, 03 and 07
2) Available only for the following Driving Records: 6* and 7*
3) Must be clear of any “at-fault” losses in the last 6 years
How it works:
1) In the event of a first at-fault loss, the current rating will go unchanged on renewal.
The only exception to this rule would be an at-fault loss that also resulted in a
criminal charge, serious charge, Insurance Fraud or Material Misrepresentation. In
those cases forgiveness will not apply.
2) On the second at-fault loss, the rating will drop as follows:
Driving Record 7 will drop to a 3
Driving Record 6 will drop to a 3
3) Please note this endorsement is forgiveness on the accident only, not for convictions.
If the accident results in a minor conviction which is in conjunction with other convictions, it still could result in a drop in rating.
4) This endorsement is deleted after the first at-fault loss and cannot be purchased again until the risk is 6 years claims free.

SEF #40 – Fire & Theft Deductible
Used to apply the deductible under Comprehensive or Specified Perils to all Fire and total Theft losses.

SEF #43R – Limited Waiver of DepreciationThis endorsement waives depreciation on new vehicles for 30 months after delivery to the insured.

SEF 43R (L) – Limited Waiver of Depreciation Endorsement (Specified Lessee)
This endorsement will protect the leasee from costs to dispose and implement agreements on a new lease.