Often, employees will use their own personal vehicle when conducting business dealings on behalf of their employer. When this happens, the employee is assuming the liability personally for this type of vehicle use. Further, any damage sustained to the employee’s vehicle during the business use is the responsibility of the employee. So, what ends up happening is the employee would end up submitting a personal auto insurance claim. Due to what could be an issue, many companies will ask their employees to show adequate liability limits and comprehensive and collision coverage on their personal policy (at least 100/300/100, call us if you are not sure what those numbers mean :)).
There are a few things the business can do to protect itself for financially burdensome situations due to an accident involving an employee’s use of their own vehicle :
- The business should have Hired and Non Owned Auto Liability Insurance Coverage which would pick up liability claims for which your employee is responsible for over and above what their personal auto insurance covers.
- Establish an area of your employee handbook/manual that outlines vehicle use and who is responsible while operating a personal vehicle for business.
- If your business outlines in a signed agreement with your employees that your business is 100% completely responsible for the personal vehicle while used on business times, you could add Hired and Non-Owned Auto Liability Coverage along with Hired Car Physical Damage coverage and your business could actually fix the damages to your employee car and be the primary payer on an auto liability claim in which your employee was responsible for (while on business time).