Jillian owns a small office supply store and sometimes asks employees to make customer deliveries in their personal vehicles. She wants to know whether she must buy separate coverage to protect the business if an employee has an accident while driving for work.
Two questions that help decide
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What type of work tasks is the vehicle used to perform?
If employees use their personal vehicles to perform business tasks, a personal auto policy may not respond to a claim and could even be canceled. Typical work uses that create higher risk include making deliveries, visiting client locations, transporting clients or employees, traveling between job sites, carrying tools or equipment essential to the job, or transporting goods or people for a fee.
Work tasks that indicate a business policy
- Make deliveries
- Visit client locations
- Transport clients or employees
- Travel to or between work or remote locations
- Transport tools or equipment essential for the job
- Transport goods or people for a fee
If employees perform any of these tasks and need to file a claim, their personal carrier might deny the claim and refuse future coverage for that vehicle.
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Does the employee have personal auto insurance that covers business use?
Personal auto policies are written primarily for non-business driving, but some include a business-use designation or allow occasional business travel. You should inspect each employee’s policy to verify whether it covers the intended use.
If the personal policy excludes the business use, either the employer or the employee could be financially responsible for damages and legal costs after an accident.
If you need a business auto policy
- An affordable deductible so the company isn’t forced into excessive out-of-pocket costs.
- Adequate liability and physical damage limits for both minor and severe accidents.
- Access to a rental vehicle if a work vehicle is frequently used and needs repairs.
- Coverage for legal expenses related to an auto claim to protect the business.
Your insurer can tailor coverage to your needs; for example, learn more about available options for businesses by reviewing Commercial Auto Insurance.
If your business regularly makes deliveries or provides services that require employee driving, compare specialized options such as Commercial Auto Insurance for Delivery and Service Vehicles, and when you want to review coverage choices, you can ask an agent to help.
After answering the two questions above, you’ll know whether employees’ personal policies are sufficient or whether a business auto policy is needed. If you purchase business coverage, confirm the policy terms, limits, and any exclusions before you rely on it.
Frequently Asked Questions
Will an employee’s personal auto policy always cover a crash that happens while working?
Not always; many personal policies exclude regular business use and could deny a claim if the vehicle was being used for work tasks.
If an employee is at fault while delivering for my business, who is responsible?
Liability can fall on the at-fault driver and potentially the employer, depending on the circumstances and whether the employer directed the task.
Can I require employees to carry personal insurance to drive for work?
Yes; many employers require minimum personal coverage levels, but that may not replace the need for a business policy when vehicles are used for company tasks.
How do I check whether a personal policy covers business use?
Ask employees to provide their policy declarations or contact their insurer to confirm whether the policy includes business-use coverage.