Here's something most Massachusetts business owners learn the hard way: your personal auto insurance won't cover that delivery van, company truck, or vehicle you use to drive clients around. The moment you start using a vehicle for business purposes—especially if you're getting paid to transport people or goods—you need commercial auto insurance. And in Massachusetts, where insurance regulations are strict and costs have been climbing, understanding your commercial auto requirements isn't just smart business. It's the law.
Whether you're running a small contracting business with a couple of work trucks, operating a livery service, or managing a fleet of delivery vehicles, Massachusetts has specific requirements you need to meet. The good news? Once you understand what you need and why you need it, getting the right coverage is straightforward.
What Massachusetts Law Requires for Commercial Vehicles
Massachusetts just made a big change to auto insurance requirements. On July 1, 2025, the state increased minimum coverage limits for the first time since 1988. For commercial vehicles, you now need at minimum:
Bodily injury liability of $25,000 per person and $50,000 per accident. This covers medical bills, lost wages, and pain and suffering if you injure someone in an accident. Property damage liability of $30,000 per accident—up from just $5,000 previously. With repair costs skyrocketing, that old $5,000 limit wouldn't even cover a fender bender on a newer vehicle. Personal injury protection (PIP) of $8,000 per person. This pays your medical expenses and those of your passengers, regardless of who caused the accident. Uninsured motorist coverage at $25,000 per person and $50,000 per accident. Because even though everyone's supposed to have insurance, not everyone does.
These are minimums. Most business owners carry significantly higher limits because a serious accident can easily exceed these amounts. If someone is badly injured and your insurance maxes out, they can come after your business assets to cover the rest.
Special Requirements for For-Hire and Livery Vehicles
If you transport passengers for money—whether you're running a taxi service, limo company, or non-emergency medical transportation—you're in a different category entirely. Any vehicle used to transport people for a fee must have a commercial auto policy. No exceptions.
While the state minimums apply to all commercial vehicles, for-hire operators face additional scrutiny. And if you operate at Logan Airport, you'll need much higher limits: a combined single limit of $1 million for most vehicles, or $5 million for motorcoaches. That's not a suggestion from the airport authority—it's a hard requirement to get your operating permit.
Here's what surprises many livery operators: Massachusetts doesn't have much state-level regulation of taxi and livery services. These businesses are regulated almost entirely at the municipal level. But the RMV won't issue livery plates unless you prove you have the required commercial insurance. So while there's no state agency breathing down your neck about how you run your business, you absolutely cannot legally operate without proper coverage.
Fleet Coverage: When You Have Multiple Vehicles
If you're running five or more vehicles, you qualify for fleet insurance. Fleet policies bundle all your vehicles under one policy, which usually saves you money compared to insuring each vehicle separately. More importantly, it simplifies your life—one renewal date, one set of paperwork, one insurance agent to call when something happens.
Fleet policies in Massachusetts work the same way as other commercial auto policies—they need to meet those same state minimums. But insurers often offer better rates for fleets because they can spread risk across multiple vehicles. They'll look at your entire operation: What kind of vehicles are you running? Who's driving them? What's your safety record? Do you have driver training programs? The better your risk management, the better your rates.
One thing to watch out with fleet policies: make sure you understand how they handle vehicles you add or remove. Most policies have provisions for this, but the details matter. The last thing you want is to buy a new truck and assume it's covered, only to find out you needed to add it within 30 days.
What Commercial Auto Insurance Actually Costs
Let's talk numbers. In Massachusetts, commercial auto insurance averages about $204 per month, or roughly $2,451 per year. But that's just an average—your actual cost could be much higher or lower depending on what you're doing.
An attorney with one vehicle might pay around $1,543 annually. A refrigeration company with four vehicles including three SUVs and a trailer? That could run over $6,200 per year. The difference comes down to risk. How many miles do you drive? What are you hauling? How many drivers do you have? What's their driving record?
And here's the uncomfortable truth: rates have been climbing. Auto insurance costs in Massachusetts jumped nearly 38 percent between 2022 and 2024. Some businesses saw increases of 60 percent or more. Why? More accidents, more expensive claims, higher repair costs, pricier medical care. Everything that insurance pays for got more expensive, so premiums went up too.
The good news is that you have some control over your rates. Higher deductibles lower your premium. Good safety records earn discounts. Anti-theft devices, dash cams, and driver training programs can all bring costs down. And shopping around matters—rates vary significantly between insurers.
How to Get the Right Coverage for Your Business
Start by being honest about how you use your vehicles. If you occasionally haul supplies in your pickup, you might get away with a personal policy that allows some business use. But if you're regularly transporting goods or people for money, you need commercial coverage. Period. The risk of having a claim denied because you weren't properly insured isn't worth it.
Next, think beyond the minimums. Yes, $25,000/$50,000/$30,000 is what the law requires. But one serious accident could blow past those limits in a heartbeat. Many businesses carry $100,000/$300,000 or higher. Consider an umbrella policy that kicks in when your primary coverage is exhausted—it's usually affordable and can save your business if the worst happens.
Work with an insurance agent who understands commercial coverage. They can help you figure out exactly what you need based on your specific situation. They'll ask about your vehicles, your drivers, your operations, and your risk tolerance. And they can shop multiple carriers to find you the best combination of coverage and price.
Finally, review your coverage annually. Your business changes, your risks change, and insurance options change. What made sense last year might not be optimal now. And with rates fluctuating as much as they have been, shopping your policy every year or two could save you thousands of dollars.
Commercial auto insurance in Massachusetts doesn't have to be complicated. Know what the law requires, understand your actual risks, and get coverage that protects your business without paying for more than you need. Your vehicles keep your business moving—make sure they're properly protected.
