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Does Your Auto Insurance Cover You For Work-Related Driving?

Man leaning out of car window holding small package to illustrate how does your auto insurance cover you for work related driving

Your company asks you to deliver a package to the post office on your way home from work and you’ll get 30 minutes of overtime pay. In the time that it takes you to drive to the post office, will your own personal auto insurance policy cover you, since this is technically a business-related trip?

If you get into an accident that causes $10,000 in damages and ends up in a $500,000 lawsuit from the other party, are you covered by your insurance liability coverage? Will you have to pay out of pocket or will your employer’s business insurance or commercial vehicle insurance cover any extra costs that your personal auto policy insurance does not cover? 

Most commercial insurance policies will cover you when you drive your car to make a business delivery. However, there is an exception to this. If the delivery of goods or people comes with paying you a fee to drive, your personal vehicle insurance company will invalidate the commercial auto coverage.  

Other points about Commercial Auto Insurance Coverage  

  • Share the ride expenses and mileage reimbursement does not void coverage.
  •  Under most policies, general business use of a vehicle (transporting supplies, visiting customers, attending seminars) does not void coverage.
  • Under the business insurance policy regarding auto usage for business-related mileage, the business is covered for bodily injury and property damage.

Employer Responsibility

The common law puts the responsibility on employers for the actions of their employees during this time. Typically, the business insurance policy covers company-owned vehicles or vehicles owned by their employees when used for business. Employers should talk to their business auto insurance carriers to know what the policy covers and if non-owned or rented vehicles are covered under this policy as well. If rented vehicles are used, employers may need to purchase an additional “vehicle rental” auto liability insurance.  

Adding Employees to Insurance Policy

Just like personal auto insurance, the commercial auto insurance policy may require the business to add individual employees onto the commercial auto policy to be sure that that employee is insured when driving for business purposes. It would be best to talk to an insurance agent to understand what your business needs are and how to best cover employees that are driving for the company.  

This is particularly important for small businesses and small business owners who may not have a large insurance budget to cover unforeseen accidents or liabilities. It would be best to talk to an insurance agent to understand what your business needs are and how to best cover employees that are driving for the company. 

5 Key Considerations for Employees

  1. Know your personal car insurance policy: As an employee, it’s important to understand what your personal car insurance policy covers in case of an accident during personal use or work purposes.
  2. Check employer’s business insurance coverage: If you’re using your own car for company business, ask your employer what the business insurance covers for employees who use their own vehicles for work-related tasks, including physical damage and liability coverage.
  3. Speak with your own insurance agent: It’s a good idea to consult with your own insurance agent to determine what additional coverage you need to add to your personal policy to provide extra protection. For example, you may need to add business-use coverage if you frequently use your own car for work purposes.
  4. Consider the best way to protect yourself: Having the right insurance coverage can help protect you and your vehicle in case of an accident on the job or other unexpected situations. So, it’s crucial to explore the best way to protect yourself in such cases.
  5. Be proactive: Take the necessary steps to ensure you have the right insurance coverage before an accident occurs. Waiting until after an accident could put you in a difficult financial and legal position, so it’s essential to be proactive in protecting yourself and your vehicle.

5 Key Considerations for Business Owners and Employers

  1. Consult with your business insurance agent about adding individual employees to the auto liability portion of your commercial policy.
  2. Check the driving history of employees making trips for the company to ensure they are not a liability to the company.
  3. Consider the type of vehicle being driven for work purposes, such as a company vehicle or an employee’s personal car, and ensure appropriate insurance coverage. 
  4. Communicate with employees about their personal insurance coverage and whether it provides protection while using their own car for work purposes.
  5. Educate employees on safe driving practices and company policies regarding work-related driving.

Getting Insurance Coverage for Business-Related Driving

If you have further questions about whether you’re covered by your personal auto insurance policy for work-related driving, or need additional information on the coverage for family members who may also use your vehicle for business purposes, give Freeway Insurance a call at 888-942-3180 and our friendly, knowledgeable insurance advisors can answer all your questions.

It’s important to know the difference between personal and commercial auto insurance policies, especially in the event of an accident while using your vehicle for business-related purposes. Understanding what your policy covers and what it doesn’t cover can be the first step in ensuring that you have the right protection in place. You can also request a free auto insurance quote  online to find out how much you can save by switching to Freeway.

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