Understanding Auto Insurance

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Do You Need Business Auto Insurance If Employees Use Their Own Cars?

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If your company owns a company car, you need to make sure that your business insurance policy also includes auto insurance. But what if you rely on employees using their own vehicles - do you still need business auto insurance?  The answer is yes.

Company Time, Company Policy

Whenever an employee is driving for company business - whether that is a vehicle owned by the company or the employee's own car - they are not covered by personal auto insurance. This is true for all types of business activities, from delivering a pizza to doing an in-home sales pitch. If your employee gets in an accident, not only will their own damages and injuries not be covered by their insurance, the damages and injuries to others are also not covered. This leaves your business liable - which could add up quickly and put your business in jeopardy. As a rule, if the employee is on company time, they need to be covered by the company policy.

The Coverage You Need

All states have different auto insurance requirements, so you should always make sure you're following all local laws. However, your business auto insurance coverage should be sufficient to protect your business against any liabilities, so an auto accident doesn't put you in financial jeopardy. Consider these types of liabilities when purchasing coverage:

  • Property damage
  • Bodily injury
  • Personal injury protection
  • Uninsured motorists
  • Collision.

Many business insurance companies will offer "hired non-owned" policies for when you rely on employees to use their own vehicles, but you will still want to make sure these liabilities are covered, to best protect your business and your employee in the event of an accident.

Whenever you're purchasing business insurance, whether for auto insurance coverage or other types, it's best to consult with your insurance agent who can help point out gaps in your coverage, or areas where two policies are covering the same event. Be sure to discuss the types of vehicle use that are required for your business, so your agent can guide you to the best policies for your company.

Car accidents can be expensive and can put your business in financial jeopardy - even if your employee was driving their own car at the time. If your employees are driving for any company business, you need to be sure you have an appropriate business auto insurance policy to protect your business's liabilities and assets.