Not all business owners need to buy commercial auto coverage, but it's a question many home-based business owners face when assessing their liability. In most cases, if you use your vehicle to deliver goods or services or to transport equipment from job to job, you need only a personal auto policy. But there are some factors that affect what type of insurance you should choose for your vehicle.

As long as you don't drive other people around often, your personal auto policy is probably adequate for your business needs. But if you operate a livery service out of your home, you're going to need a commercial auto policy — insurance that will cover your business assets if you're involved in an accident.

Specific auto coverages aren't affected by whether you have a commercial auto policy or a personal auto policy for your home-based business vehicle. If you have a personal auto policy and go on vacation, you're covered. Other drivers and family members who drive the vehicle will be covered, too. The same goes for a commercial policy. For example, if you want your husband to be able run errands with your business vehicle, your commercial auto policy will cover him. If you have an employee, your commercial auto policy will cover him or her. However, if your employee is injured in an accident, he or she will not be covered by your auto policy — this would be covered by workers compensation.

Insurance costs

The cost of your home-based business auto policy is calculated much like your regular car insurance: Insurance companies look at the number of miles you drive, who will be driving the vehicle and your driving record and claims history. Other major factors are your liability limits and comprehensive and collision deductibles. The higher your coverage limits, the more your premium. Lower-amount deductibles will cost more as well.

However, make sure that your liability limits are enough to cover both your personal and business assets. If you cause an accident, the injured parties can sue you as an individual and as a business owner. To minimize financial risk, most agents recommend high liability limits such as $250,000 for bodily injury coverage for one person, $500,000 for bodily injury for all persons, and $100,000 for property damage coverage.

The bottom line is this: Whichever policy you choose, commercial auto or personal auto, you'll be protected just as you are under a regular auto insurance situation. The claims process is the same, the legal defense service your insurance company offers you after an accident is the same, and the cost difference between a personal auto policy and a commercial auto policy for a home-based business owner is often negligible.

Insure what you haul

Many home-based businesses need to shuttle equipment from job to job, like power washers and ladders for house painters, or lawn mowers and other gardening equipment for landscapers. If you own a home-based business, you may already have property and liability coverage under a business owners policy, or BOP.

Keep in mind, though, that if you permanently afix a piece of equipment — like a generator — to your vehicle, that generator won't be covered under your BOP. You'll have to increase your insurance on the vehicle itself in order to cover items that are permanently attached.