Won’t their personal insurance plans cover any wrecks they have?
The answer to this question is yes and no. Like most things in life it depends. If your employees drive their personal cars for business operations, you do not necessarily need a full commercial auto insurance policy. There is another policy that will cover just this situation. The coverage is called Hired and Non-Owned Auto Coverage. This coverage is specifically for businesses who have employees who either use their personal car for work or drive a rented car at some time for business purposes.
Hired and Non-Owned Auto Liability covers bodily injury and property damage caused by a vehicle you hire (including rented or borrowed vehicles) or caused by non-owned vehicles of your employees. In most cases it does not pay for the physical damage to the vehicle itself; that’s covered by the owner’s insurance. Although this option is available on some policies.
Whether you realize it or not, as a business owner, you at least occasionally find yourself in situations where this coverage is needed. Errands and rental situations always come up. Just a few examples of when there is a need for this coverage include: When you send an employee to pick up lunch, renting a car while on a business trip, to impress a client, you send a limo to pick them up, or an employee runs to pick up office supplies at the local Sam’s club.
So the answer to the original question: Won’t their personal insurance plans cover any wrecks they have? It may cover damage to their vehicle, but in most cases it will not cover any liability to the other person who’s may be injured or whose car has been damaged. The reason for this is because the only reason the employee is driving at the time of the wreck is because of the directions of the business. Had the person not been working there is no reason to believe the person would have been behind the wheel at that place in time. For that reason, the liability is the responsibility of the business and not the individual employee. This is why it is important to have the right form of commercial auto insurance.
For this reason, it is crucial to secure hired and non-owned auto coverage for your business. Not just a commercial auto insurance policy. It can be added to most business owner’s policies for a minimal amount. No matter what the amount of the premium, it will most certainly be less than the damage to your business if an accident happens and you are not covered. Uncovered losses involving a vehicle are the types of losses that some businesses are not able to survive.