In some companies, a business-owned vehicle for use by your employees just doesn’t make sense. But that doesn’t mean that the business never has errands that need to be run. For instance, let’s say you have a small jewelry store. If you never travel to meet clients then it might not make sense to own a company vehicle for your employees’ use. But you might still need an employee to run to the local office supply store to pick up paper, receipt tape, pens and other basic supplies. For many businesses, that means that employees will travel to the office supply store to run a business errand in their personal vehicle.
If that employee should get into an accident in their personal vehicle on their way to run this errand for your business, their personal auto insurance policy will cover much of the basic claim. But if the accident is their fault and the injured party decides to sue for damages, they could sue your business since the employee was out on your company’s behalf at the time of the accident. In order to protect your business from the liability imposed by these potential claims you can add non-owned auto coverage into your business policy.
With non-owned auto coverage, you have a resource for covering the property damage and liability claims that can arise from an accident that occurs when an employee uses his or her personal vehicle for a business-related use. This type of coverage steps in when the limits of the employee’s personal policy are reached and can protect your business assets from the claims of injured accident victims.
When you choose to add non-owned auto coverage in your business auto policy, that doesn’t exactly mean you have a free-for-all in the event of employee accidents. Claims against your policy could increase your rates so you should still attempt to regulate the employees who run your business errands in their personal vehicles to help reduce the likelihood of accidents. For instance:
- Manage and monitor your employees’ driving records so that you can send only the most responsible drivers off on errands in their cars.
- Consider investing in a defensive driving course for employees who frequently run your errands in their personal vehicles.
- Avoid asking younger, less experienced employees to run errands.
Between cautious behavior and proper insurance you can protect your company from unnecessary and expensive claims while still getting your office supplies purchased and small errands run when you need them.
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