Does Commercial Auto Insurance Cover Employee Vehicles?

Commercial auto insurance policies are designed to cover vehicles used or owned by the business, but insurance can get slightly more complicated when it comes to employee vehicles. If your employees use personal vehicles for work, they may not be covered under your business’ basic commercial auto insurance policy.

What Does Commercial Auto Insurance Cover?

If your business owns commercial vehicles, such as delivery trucks, commercial auto insurance can cover damages to the vehicle and its occupants. A basic commercial auto insurance policy may include: a person standing in front of a truck

Comprehensive Coverage: Comprehensive coverage provides compensation for damages to the insured vehicle caused by wind, fire, hail, lightning, falling objects, theft, vandalism and more.

Collision Coverage: Collision coverage provides compensation for damages to the insured vehicle caused by a collision with another vehicle or object.
Liability: Liability insurance covers bodily injury and property damage a driver may cause someone else while operating the insured vehicle.
Medical Payments Coverage: Medical payments coverage provides compensation for injuries the driver and their passengers may sustain after an accident, no matter who is at fault.
Uninsured/Underinsured Motorist: This insurance covers expenses (such as medical bills and property damage) that occur in an accident with a driver who is not carrying the proper amount of insurance.

This coverage generally applies to commercial vehicles owned by the business, however. If your business rents or hires other vehicles, you will need Hired and Non-Owned Auto Insurance.

What is Hired and Non-Owned Auto?

Hired and Non-Owned auto insurance is a policy you can add to your commercial auto insurance that covers vehicles your business does not directly own. This includes employee vehicles. If an employee is driving their car for work purposes, they may not be covered under your basic commercial auto insurance policy or their personal auto insurance policy. This is why it is important to offer additional auto insurance in case of an accident. If an employee gets in an accident while operating their vehicle for your business, responsibility for the damages and injuries could fall on your shoulders.

This does not apply if your employees simply use their personal vehicles to commute to and from work. In this case, their personal auto insurance policy should cover them without assistance from your business’ commercial auto insurance policy. However, if employees frequently travel, transport equipment and goods, or take clients out with their personal vehicle for work, they should be covered under your policy.

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