If an employee is in an auto accident while on the way to or from work, then that’s their insurer’s problem, right? And of course, if they have an accident while they’re driving a company car, then your commercial auto insurance provider is the one that foots the bill. Now here comes the tricky gray area: what if they’re in their own car, but they’re on company time, doing something that you asked them to do?
Here’s the short answer: Usually the driver’s insurance will wind up covering any costs incurred from the accident. But, there are plenty of exceptions.
Livery
“Isn’t that where the horses are stored for the night in the old westerns?” Yes, but also, in insurance terms, it refers to drivers who are transporting other people for a fee. If it’s two employees sharing a car, that doesn’t count. Livery just refers to transporting people who are paying for the ride (and not just “pitching in a couple bucks for gas”).
Delivery
Certain types of delivery services will invalidate the driver’s coverage, depending on their policy. Some providers won’t over pizza delivery men at all, for instance.
General Business Use
Picking up supplies, driving clients around, uprooting tree stumps, this is generally not covered under an employee’s personal insurance policy.
In short, here’s what you can be absolutely certain your employee’s personal insurance will cover: Themselves, their vehicle, and their passengers when driving around, whether that be on lunch breaks, to and from work, picking up another employee from their home, and meeting other basic transportation needs. If they’re on company time, that doesn’t mean that you’re going to be held responsible, but if they’re doing paid company work with their vehicle, then that may fall under your business insurance policy.
This is, in part, why it’s very important to ensure that safety procedures are followed off the job site as well as on the job site, and why you really do need to be careful about who you’re putting your trust into when it comes to even the simplest tasks. Turning a blind eye to an employee who has a beer with lunch might not be such a big deal, but you don’t want him picking up building materials for you.
Basic transportation is covered under your employee’s personal insurance policy, but make sure that you have the right provisions on your business insurance before asking a worker to tow the cement mixer back to the lot.
