If an employee is in an auto accident while on the way to or from work, then that's their insurer's problem, right? And of course, if they have an accident while they're driving a company car, then your commercial auto insurance provider is usually the one that foots the bill.
Now here comes the tricky gray area: what if they're in their own car, but they're on company time, doing something that you asked them to do?
Here's the short answer: usually the driver's personal insurance will wind up covering any costs from the accident, but there are plenty of exceptions and some employer policies can be implicated depending on the situation.
Livery Auto Liability Insurance
"Livery" in insurance terms refers to drivers transporting paying passengers — for example, drivers working for a taxi or rideshare service. If two employees share a car without collecting fares, that usually isn't livery, but transporting paying customers generally triggers different underwriting and coverage rules.
Delivery
Certain delivery activities can invalidate a personal auto policy depending on the insurer and the specific policy language. For example, some personal policies exclude coverage for drivers who use their vehicle to make deliveries for a business.
General Business Use
Tasks like picking up supplies for the company, driving clients around, or hauling equipment for pay may not be covered by an employee's personal policy. If an employee is performing paid work for the employer while driving their own vehicle, that activity can fall under the employer's commercial auto policy instead of the employee's personal policy.
For guidance on coverage when employees transport others or use personal vehicles for work, see Employee Transportation Insurance for common considerations and options.
In short, you can be reasonably certain an employee's personal insurance will cover the driver, their car, and any passengers for ordinary, personal travel — commuting, lunch breaks, or giving a coworker a ride home. But if the employee is on company time performing paid work with their vehicle, the employer's policy may apply.
This is one reason to enforce safety procedures both on and off the job site and to be careful about assigning tasks that expose employees to additional driving risk.
If you have questions about how your business should handle coverage, see Hotlines — Insurance considerations for resources and then consider whether to talk to an agent to review your commercial auto provisions.
Frequently Asked Questions
Who pays if an employee driving their own car is in an accident while picking up supplies for work?
Often the employee's personal insurer is first, but the employer's commercial policy may apply if the employee was performing paid work at the time; it depends on policy language.
Does personal auto insurance cover someone delivering goods for their employer?
Some personal policies exclude delivery or business use, so drivers who deliver for pay may need commercial or hired-and-non-owned auto coverage.
Is giving a coworker a ride considered a business use?
Typically no — informal carpooling or giving a ride to a coworker for personal reasons is usually covered by personal policies, but context matters.
What should an employer do to reduce risk when employees use personal vehicles for work?
Set clear written policies on permitted vehicle use, require proof of insurance, and review commercial auto or hired-and-non-owned coverage with an agent.