A women who worked for a California laundry service found out in a recent fender-bender that while out making a delivery that her personal vehicle’s insurance didn’t cover the accident. Since she was working at the time, and transporting customer goods during the time of the accident, her insurance company decided that the accident fell under the purview of “work-related” and would not cover her accident, or even a tow truck. Her employer, while it had asked for her insurance information when she started working for them, did not mention the need to upgrade to commercial coverage for her auto insurance.
This raises the question of where the coverage for personal insurance ends, and commercial car insurance starts.
When Do You Need to Commercially Insure Employee Vehicles?
In the more recent years of ridesharing, such as with Uber and Lyft services, insurance companies have been cracking down on insurance claims on personal policies, especially concerning liability. While July 15th saw laws brought into order to require these companies to provide liability insurance to their drivers, they still don’t provide insurance for collision. This change has brought about a higher vigilance in insurance companies: if you meet any of the following requirements, it’s time to get commercially insured:
- If your primary job is transporting goods or people in the vehicle.
- If your vehicle is primarily used for any commercial services.
- If what you’re transporting requires high liability insurance limits.
- If due to the nature of the vehicle or modifications it require special insurance.
- If you spend most of your time on the road on company time.
Want examples of traditional commercial vehicles? Check out our blog Insuring Commercial Vehicles.
When Do You Not Need to Commercially Insure?
With the above statements said, for the average employee they will not need commercial insurance. Commuting two or from work, or making trips to visit clients, pick up office supplies, or the like will be covered under personal insurance. It’s when your primary duties require you to burn rubber is when you need to look at commercial insurance.
Your Options When You Do Need to Insure Your Car for Business
So, you and your employer (which in some cases may be the same person) have talked about it, and there seems to be a gap in the insurance between the company’s Business Owners Policy and the personal car insurance on the vehicle. There are several options:
- Company Car: This is a great option because it allows the employer to insure only a small group of vehicles, and to provide a constant image to their clients when they pull up.
- Individual Insurance: If you employee (either directly or as contractors) people who have to use their personal cars constantly for the above reasons, work with them to get them insured. This could be a job requirement or partially paid by the company (such as with health insurance).
- Business Policy: An alternative is to have the business simply cover all vehicles that could fall into this category, employee owned or not.
Want additional help figuring out if your vehicles need to be commercially insured, and how much such coverage would cost? Here at TJ Woods Insurance Agency, we can provide you with all the information you need to bring to your employer (even if they are yourself) and provide a free quote on the policies. Contact us today!
