When you drive a company car or run a business where employees use company cars, it is important to be sure you understand company car insurance to be sure you are adequately covered for anything that might happen. Company car insurance makes sure that you have the coverage you need no matter how your vehicles are used for company business.
In some cases, people drive company cars for business and personal reasons alike and do not own a vehicle of their own. These people will need to be covered under company car insurance. In other cases, people drive personal cars to work and then drive a company car only during work hours. The car will have company car insurance and the driver will also have his or her own personal car insurance. Other times, employees may use their personal vehicles on company business. These employees will be covered by both company car insurance and personal auto insurance.
Using Company Car Insurance
When employees use company owned cars for both business and personal reasons, company car insurance is needed. If the employee does not have a personal vehicle with a separate, personal auto policy, you will need to get a “Drive Other Car” endorsement on company car insurance. This fills in any gaps in coverage between the personal auto policy and the company car insurance.
If employees use personal cars on company business, then the company car insurance can cover "all autos", giving coverage for the employee's vehicle only when it is being used on company business.
What Personal Autos Cover
If you have a personal auto policy on a car you use for a business that you own, the personal auto policy will only pay to defend you personally.
If you have employees who regularly drive their own cars for business, you will need the Non-owned Auto Liability Endorsement on your company car insurance. This gives coverage above the personal auto liability limits, which are rarely enough to cover the kinds of claims that can result from a large accident.
Differences for Company Car Insurance
There are different requirements for company car insurance. They will need to carry the same coverage as personal auto policies, but with higher liability limits. It is most often recommended that company car insurance has liability limits of at least $1,000,000.
A Business Auto Policy is most commonly used to provide company car insurance. It provides property damage and bodily injury coverage under one “Combined Single Limit”. This is different from personal auto policies that have separate limits for each.
You should understand that company car insurance is necessary because your business owner’s policy does not cover liability from auto accidents. They expect you to secure company car insurance for these types of claims.
