Your company has employees, and your employees have cars. When they use their cars on behalf of your business and get into an accident, who is liable for the accident? In our blog When Do You Need Commercial Car Insurance? we took a look at some examples where the line becomes blurred and insurance policies revoke their coverage. Today we’ll go over signs that your company needs to provide insurance for your employees, and how a non-owned auto coverage policy might be the right choice between no coverage and getting company cars with commercial vehicle insurance.
Personal Auto Insurance vs. Commercial Auto Insurance
When you have vehicles that are bought and owned by the company, they need commercial auto insurance. Usually, these vehicles are specifically designed as work vehicles, such as cargo and passenger vans, box trucks, and delivery vehicles, and cannot be insured as personal vehicles (see our full listing here). However, the issues arise when personal vehicles are used while commercial vehicles but using the employee’s own insurance, which is not designed to provide that kind of coverage.
When Employees Are on Company Business
When your employees are using their personal cars for company business is when liability becomes a gray area. While commuting to work is completely covered under personal insurance, work done while on the clock for your company depends largely on frequency and distance, measured in risk. If your employee gets in an accident while working on behalf of your company, you could be held liable. If your employees spend a lot of time in personal vehicles on company business, it’s time to get non-owned coverage.
Hiring Vehicles for Company Use
Much like with employee personal vehicles, hiring personal vehicles at a car rental agency can also become an issue. If your company either hires out vehicles on a regular basis, or travels internationally and makes use of rented vehicles, there are similar hired auto policies for your company that can supplement the agencies own liability.
Getting Non-Owned Auto Coverage Endorsement for Your BOP
To provide coverage for employee owned (or rented) vehicles on commercial business, your best option is getting a non-owned auto endorsement on your existing BOP (Business Owner’s Policy) to extend liability protection in these cases. It sidesteps issues such as commercial auto policies on employee-owned vehicles. Instead, these will meet contractual requirements for Commercial Auto coverage but without the larger cost of such policies per vehicle. Hired auto coverage replaces or augments liability coverage offered by rental agencies.
Protecting your employees from being liable while working for you provides security: for both your employee’s peace of mind while they work, as well as your own for liability protection on suits leveled against your company. If you want to talk further about the general or specific liabilities of your business, contact the TJ Woods Insurance Agency. We can help you with Business Owner’s Policies, as well as specific property liability, specialized business policies, and employee-based insurance such as Workers’ Compensation.
