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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? This article will review the signs that your company may need to provide auto insurance for your employees and cover how a non-owned auto coverage policy might be the right choice.

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. However, when personal vehicles are being used for commercial purposes but aren't insured as such, issues can arise. Personal auto insurance is not designed to cover the same things that commercial auto insurance does.

When Employees Are on Company Business

woman driving a car and looking at watchWhen your employees use their personal cars for company business, liability can become a gray area. While commuting to work is completely covered under personal insurance, work done while on the clock for the employer may not be. This 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. So, 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 employees using their personal vehicles, hiring personal vehicles from a car rental agency can also cause issues. If your company hires out vehicles regularly or travels internationally and uses rented vehicles, there are similar hired auto policies for your company that can supplement the agency's 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.

The right auto insurance for your business offers security to everyone involved. It gives your employees peace of mind while working and gives you peace of mind knowing that you have liability protection in case lawsuits are filed against your company. Contact your commercial insurance agent today to be sure you have the right policies in place for your driving employees.



This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.

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