Keven Moore regularly authors articles on insurance and safety matters, and he’s come up with another brilliant summary of the sticky issue of using your personal vehicle for company business.
His original article can be found by clicking HERE.
Suppose your teenaged son or daughter wanted to deliver pizzas in his/her spare time to earn some cash towards their own car or reimbursing you for the gas they spend from your tank (I can dream, can’t I?) They get a job, but have a fender bender on their third week of working.
- Surprise #1 = the pizza chain’s insurance is excess after your family coverage is exhausted.
- Surprise #2 = your personal auto policy may specifically exclude any/all work related travel (other than commuting to an office or job location)
- Surprise #3 = you’re now covering the whole claim out of pocket – not just your deductible. Ouch! (OK, I’m exaggerating — the employer’s coverage ought to kick in if they’ve got “non-owned auto” coverage and have listed the delivery driver’s vehicles, but…what if it didn’t?)
As Keven points out in his article;
…many auto insurance carriers exclude business use of personal vehicles, such as for delivering pizzas, flowers, sub sandwiches and groceries. As a result, there are tens of thousands of part-time delivery drivers riding around your streets today without coverage because of this exclusion on their auto insurance policy…Pizzerias that deliver are not going to come out and tell you that your auto insurance carrier will probably exclude you from their policy and that you are delivering pizzas without any insurance coverage. So it’s up to you to call your insurance agent to verify coverage.
Keven also offers some good reminders:
- If you plan to use your personal auto on company business, inform your agent ahead of time and confirm that your policy will cover you in the event of a crash.
- If you get a ticket on company business, it will still post to your personal MVR record (affecting your personal insurance rates and future employ-ability rating)
- Many employers that require you to use your own vehicle will ask for proof that you have personal auto coverage, and what limits you carry. This helps them manage their risk that your coverage would be exhausted and their coverage would have to kick in to pay the claims.
- Especially tragic crashes may go into litigation, and if the employer’s policy limits are exhausted in settling the claim, your personal assets could become a target to satisfy the judgement.
As employers, it’s important to make sure your drivers have adequate coverage if their operating their vehicles on the company’s behalf. As drivers, it’s also important to verify that you have sufficient coverage on your own car and that it covers business trips adequately.
SafetyFirst isn’t in the insurance business, but we work with a network of 75+ insurance providers. We also have employers who use our online services to help keep track of the insurance coverage of drivers who use their own cars on company business (while also looking at their MVR records, offering supplementary driver training, etc.) If you’re an employer who is struggling with record keeping issues related to driver safety and risk management, give us a call or check out our web site!