Aug 10
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Does Commercial Auto Liability Insurance Completely Protect Employees with Company Cars
Employees and corporate officers of companies frequently receive company cars to drive as a perk to their employment. But how the insurance for that vehicle is handled by the company’s commercial auto policy is important to understand. Business car insurance is not as broad as the Personal Auto Policy; as such, employees should be aware of how the company’s insurance policy is covering them for the use of that vehicle. Here are some of the questions that should be asked about commercial auto liability insurance for company cars:
When is the Employee Authorized to Use the Company Car
When a company offers a vehicle to an employee, there should be a written agreement stating the conditions of the permitted usage. In this agreement, it should be noted whether or not the employee is permitted to use the vehicle for personal or recreational usage. Sometimes the company only wants the employee to use the vehicle for business situations. This is an important detail because if the there is an accident and the employee is not officially authorized to drive the car, commercial auto liability insurance
coverage might be questioned.
Who is Authorized to Use the Company Car
If the employee is permitted to use the vehicle for personal usage, is there coverage for a spouse. If the couple has no personal autos of their own and no other auto insurance, the question is of particular importance. Even so, if the spouse is not authorized to use the vehicle and an accident occurs, the business auto policy will likely deny the commercial auto liability insurance claim. If the couple has a Personal Auto Policy, coverage would have to come from it for an accident.
Some Ways for Businesses to Cover Employees and Company Cars
Drive Other Car Insurance
The Drive Other Car Endorsement can be added to a Commercial Auto Insurance policy to provide coverage for employees when they are driving a car other than the company car. This endorsement will also cover the employee’s spouse automatically, though not the employee’s children. The endorsement can be arranged such that it also covers Uninsured Motorist and Personal Injury Protection in addition to commercial auto liability insurance coverage. If the employee needs to have coverage for children, each child needs to be added to the endorsement.
Individual Named Insured Endorsement
If the driver of the company car is an owner of the company, commercial auto liability insurance for the owner and the owners’ family can be added at no additional charge with the Individual Named Insured Endorsement. The caveat to this endorsement is that the commercial auto policy must contain at least one private passenger vehicle. This endorsement provides coverage for all family members of the owner living in the owner’s household just like a Personal Auto Policy does.
In the long run, it is always in a person’s best interest to have some Personal Auto Insurance, even if they do not own a car. The coverage that is provided not only when driving a non-owned vehicle is just one of the advantages. Other advantages include Uninsured Motorist Insurance and Personal Injury Protection coverage while a passenger in another car and as a pedestrian. Finally, having a Personal Auto Policy can be a great benefit when trying to navigate through a car insurance claim. Another person’s insurance company is not likely to be as accommodating or helpful to a claimant as their own insurance company might be.
A Non-Owner auto liability insurance policy is relatively inexpensive, especially for the protection if offers.
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