If you don’t own a business, chances are you have never given commercial auto insurance a thought. But it’s highly probable you will need a commercial policy even if you don’t own a business, particularly if you use your own vehicle for work purposes other than commuting. The Hancock County Board of Supervisors discovered Monday that any employee who drives his/her own personal vehicle on a regular basis for business operations is not covered under his/her personal vehicle insurance.
Discussion began when the county’s head of maintenance Kevin Hoeft was told by his insurance company that his personal vehicle insurance was not liable for Hoeft to conduct business operations during business hours, such as driving to the post office daily to retrieve the mail for various county offices. The Hancock County Board of Supervisors also spoke with Luann Gatchel, the county’s insurance agent about coverage. According to Tlach, the county’s only real option is to purchase a vehicle for employees to drive for business purposes during business hours.
According to the Insurance Information Institute, in most cases, your personal auto insurer will not defend or pay damages when an accident occurs while conducting routine business operations for your employer. It seems there’s lots of confusion even among insurance agents regarding what is truly covered under a personal auto plan – as some agents think you’re covered but in reality – the fine print of your policy does not agree.
THIS AFFECTS BUSINESS OWNERS TOO.
According to the Insurance Information Institute (III), if you are a business owner, it is advised to have sufficient liability coverage to protect your business in the event of a serious auto accident caused by your employee. Do not rely on a personal umbrella policy for any claims that arise from business use of a vehicle. Typically, the personal umbrella excludes all claims occurring in the course of a business endeavor. The III says most businesses should buy the type of coverage that insures all autos used for the business, including those that your business does not own, hire or lease, as that is the only coverage that protects the business from liability when an employee is driving a personal vehicle on business time.
So here’s a quick scenario. If your employees drive their own cars for business purposes – to visit clients, for example – your business could wind up liable for property damage and bodily injuries resulting from a traffic accident for which an employee was at fault. Even a quick stop to the office supply store to pick up items on your employees way back from lunch, this is also a situation where a business can find itself liable for an auto accident with damages higher than the policy limit of the employee’s personal auto policy. The III says one way to protect your business from these liability risks is to add a non-owned auto liability endorsement to your business auto coverage form.