If you are in charge of ensuring that your company’s vehicles have adequate insurance coverage, there are a number of questions you might have. Here are a few of the most common questions we’ve run into with regard to personal use of a company vehicle.
Do I Need Special Coverage If My Employees Take A Company Vehicle Home?
This can be something of a complicated question. You, as the employer, have insured for any car covered by the policy. However, your employees are only insured if they are using a vehicle owned, borrowed, or hired by your company in the scope of the business’s operations. What this means is that you may be covered if you use a company vehicle for personal reasons, but your employee will not be.
However, the employee’s personal car insurance policy could cover them during their personal use of a company vehicle; this is something that they need to personally confirm with their agent, however.
Another option is for the employer to extend personal coverage to the employee by adding additional endorsements to their coverage. For example, Individual Named Insured endorsements usually cover this type of use.
In either case, the employer should get confirmation that an employee’s personal use is covered if they take a vehicle home overnight.
Can Family Members Of The Employer Use The Company Vehicle?
Typically, with personal insurance policies, household members are covered for use of the vehicle so long as there has been accurate disclosure regarding who lives there. However, that isn’t always the case when it comes to company-owned cars. You’ll need to confirm whether or not household members are covered by talking to your agent.
Personal insurance coverage can be extended to your legal spouse via additional endorsements like Driver Other Car Coverage, but this doesn’t apply to children who are of age to drive; this will require further endorsements or adjustments. You’ll want to go over these possibilities in detail with your carrier—it’s also possible that your carrier won’t allow it, regardless of adjustments, as underwriters are usually hesitant to add children to any commercial policy.
Can A Personal Vehicle Be Added To A Commercial Policy?
Your commercial auto insurance policy is designed to cover cars and other vehicles which are owned by your company. It can also apply to vehicles hired for company use, and vehicles borrowed by the company. What it does not apply to is a vehicle that you personally own. This is by design; carriers intend to exclude personally owned vehicles because they should be covered under another, separate, personal policy.
There are some exceptions to this, but they are by no means guaranteed to be offered by your carrier. For example, some carriers will allow the primary owner of the company to be added as an additional named insured purely for the purpose of auto insurance coverage.
However, if you are talking about another employee, it would be necessary for the company to draw up a formal agreement, like a lease, to indicate that the company is hiring the car. In this case, the vehicle would be covered as a company vehicle and the owner of the vehicle would be considered as an insured member.
All of these exceptions come at an additional charge to your premium however; it is usually easier (not to mention cheaper) to simply draw a firm line between commercial and personal insurance. If you are not sure of where that line should be, you should discuss the details of your needs with your agent.