When purchasing commercial auto insurance for your business, it's important to consider who will be driving the insured vehicles. Most employees will be covered under a commercial auto insurance policy, but there are exceptions.
Family members, friends and spouses of employers and employees likely won't be covered by a commercial auto insurance policy. An employer may extend coverage to their partner, but not their children.
Does Commercial Auto Insurance Cover Personal Use?
For the insured (the employer), the commercial auto insurance policy should cover personal use. Employee personal use won't always be covered, however. Some company vehicles are offered to employees for commercial and personal use. Other company cars are meant only to be used within the scope of employment — such as buses and certain cargo vehicles. Be sure to research and discuss what type of policy you have and what it covers. Employees should clarify with their employer about what the company vehicles may be used for.
Does Commercial Auto Insurance Cover Independent Contractors?
You may give an independent contractor permission to drive a company car, but generally, independent contractors should carry their own form of commercial auto insurance. Ask for proof of insurance before allowing an independent contractor to drive a company vehicle. If it is within the scope of work activity, commercial auto insurance should cover an accident with an independent contractor using a company vehicle.
Ways To Avoid Insurance Claims On Company Cars
- Advise employees not to allow their partners or children to drive the company car
- Consider the driving record of a potential employee during the background check
- Encourage employees to take defensive driving courses
- For certain industries that require a lot of driving, require driving certifications
- Ensure independent contractors carry commercial auto insurance
- Limit personal use for company vehicles
If employees use personal vehicles for work purposes, you may extend your company's commercial auto insurance policy with Hired and Non-Owned auto coverage. This coverage extends to vehicles that are hired or borrowed by the company for work purposes and protects the company from possible claims. Employees who use personal vehicles for work should consider purchasing their own commercial auto insurance policy.
In short, be careful about who you allow to drive company vehicles. Although most employees should be covered under your company's commercial auto insurance policy, there are exceptions. So, it's important that you allow someone trustworthy behind the wheel.
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