For some small businesses owning a vehicle strictly for employee use just doesn’t make fiscal sense. That doesn’t mean, however, that the business never has errands that need to be run. For example, let’s say you have a small jewelry shop and you never have to travel to meet clients; in this case, it may not make sense to own a company vehicle for your employees’ use. You still may need an employee to run to the local office supply store to pick up paper though and that means that employees will travel to the office supply store to run a business errand in their personal vehicle.
If your employee should get into an accident in their personal vehicle on their way to the office supply store, or running any other errand for your business, their personal auto insurance policy will cover much of the basic claim. But, let’s say the accident was their fault and the injured party decides to sue for damages; the injured party can now sue your business since the employee was out running errands for your jewelry shop when the accident happened.
In order to protect your business from the risks illustrated in the example above, you should add non-owned auto coverage into your business policy.
With a non-owned auto provision, you have protection in place to cover any property damage and liability claims should your employee have an accident in his or her personal vehicle running a business-related errand. This type of coverage steps in when the limits of the employee’s personal policy are reached and can protect your business assets from the claims of injured accident victims.
When you choose to add non-owned auto coverage to your commercial policy, it doesn’t exactly mean you have a get-out-of-jail-free card for all employee accidents. Claims against your company’s insurance will increase your premiums. To prevent a rate increase, you should attempt to regulate employees who run errands for your business in their personal vehicles to reduce the likelihood of an accident. For instance:
- Consider holding a defensive driving course for employees who frequently run your errands in their personal vehicles.
- Do not ask younger, less experienced drivers to run errands for your business unless it’s an emergency.
- Request a copy of your employees’ driving records so you can assess who the most responsible drivers are, and only send those employees on errands in their cars.
Cautious behavior and proper insurance you can protect your company from expensive and unnecessary claims while still getting your small business errands run when you need them. If you need help setting up the Edmond Business Insurance policy that fits your business and budget, give Loftis & Wetzel a call at 855-360-0466. Our agents are waiting to help find you a policy fit just for you and your business, at the best price possible.