Company Car Insurance – Does that Cover My Personal Vehicles?

Commercial auto insurance is different from personal insurance. Company auto insurance can be complicated and a variety of questions can arise when deciding to open up a business auto insurance policy. Commercial auto insurance provides coverage for automobiles, vans and trucks that are used for business purposes, but what if a business owner (or employee) is driving their personal vehicle – will personal vehicles be covered on a company car insurance policy?

Commercial car insurance is necessary for business owners for three reasons:

1.    Personal insurance policies are not designed to pay for the cost of risks that are associated with business vehicles.

2.    It is required by law.

3.    A claim will likely be denied under a personal insurance policy if the vehicle was being used for business.

Commercial-style vehicles that are used for personal reasons can also be insured under a commercial truck or van insurance policy. Some examples of personal-use vehicles that are eligible to be covered under a commercial policy include flat bed trucks that are used to transport show vehicles, dump trucks that are used for keeping your personal property clean, a box truck or a delivery van.

Some vehicles work twice as hard – doubling as a company car and a vehicle for personal use (running personal errands and picking the kids up from school), after work.

In addition, commercial insurance traditionally extends liability coverage to employees who are driving their own vehicle for business purposes. However, employees who use their own vehicles for business purposes are covered, primarily under their own personal insurance policy.

Commercial Car Insurance Basics:

To put it simply:

Company-Owned Vehicle: If a business owns a vehicle (or vehicles) that has the company’s name on the title – commercial auto insurance is required.

Owner’s Personal Vehicle for Business Use: If a business owner has no employees and the company vehicle is used for driving to work – a personal insurance policy will provide the necessary coverage.

Owner’s Personal Vehicle for Personal and Business Use:  If a business owner has a vehicle that is used for both personal and business purposes – a commercial insurance policy is required, in order to have the coverage that is mandated by law. According to Nationwide Insurance, when the vehicle is not being used for business, the owner may want to consider a drive other car endorsement to protect the owner or any family members who may be driving the car.

Employee’s Personal Vehicle for Business Use: If employees use their own vehicles for business use – the employee should have sufficient liability on their own personal policy. For example, if an employee is making a bank deposit in their own vehicle and is involved in a collision with another driver, their personal insurance company will be responsible for the damages caused to any other cars or anyone else involved in the accident. However, if the other drivers sue the company for damages, a commercial insurance policy with a non-owned vehicle liability endorsement will protect the assets of the business, in the event of an expensive lawsuit.

Business owners have worked hard to build up their business, so it is important to understand what is required

by law for company auto insurance — to protect their personal assets, the assets of the business and their employees.

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