What If an Employee Uses Their Own Car for Business?
Whose Insurance Applies When an Employee Drives Their Own Car?
The answer depends on the accident, the employee’s personal auto policy, the business’s commercial auto coverage, and the specific circumstances of the business use.
Coverage on the Employee’s Vehicle
The employee’s personal auto policy may provide applicable liability protection for the employee and may provide physical damage coverage for the personally owned vehicle when that coverage has been purchased.
Liability Protection for the Business
Non-owned auto liability coverage may help protect the business when an employee uses a vehicle the company does not own for company business and the business is alleged to be legally responsible for an accident.
Business Auto Exposure Can Begin With a Simple Errand
A company does not need to own a large fleet to have auto liability exposure. Employees using personal cars for routine business activities can create a non-owned auto exposure.
Bank & Post Office Runs
An employee may use a personal vehicle to make deposits, pick up mail, deliver documents, or complete another company errand.
Client Meetings
Salespeople, account managers, supervisors, or other employees may drive personal vehicles to meet customers or visit business locations.
Picking Up Supplies
Employees may use their own cars to purchase supplies, parts, equipment, food, or other items needed by the business.
Travel Between Locations
Employees who travel between offices, stores, worksites, customer locations, or other company facilities may also create a business auto exposure.
What Should a Business Review Before Employees Drive?
A basic employee-driving process can help a business understand who is driving, whether appropriate personal auto insurance is maintained, and whether commercial non-owned auto coverage should be considered.
Identify Employee Drivers
Keep track of employees who regularly or occasionally use personal vehicles for company activities.
Verify Personal Insurance
Consider establishing a process for confirming that employees who drive for business maintain required personal automobile insurance.
Review Driver Eligibility
Depending on company policy and applicable requirements, businesses may review licensing and other driver information before authorizing business driving.
Ask About Non-Owned Auto
Review whether the commercial auto or liability program includes non-owned auto liability and how it applies to employee-owned vehicles.
Do Employees Use Personal Vehicles for Company Business?
Best Formula Insurance can help businesses review Commercial Auto coverage, non-owned auto liability, employee-driving exposure, company-owned vehicles, hired autos, and other transportation-related insurance needs.