Employees Using Company Cars Full-Time? 4 Reasons To Increase Liability Coverage
Do you have or are you planning to buy company vehicles for some employees? Making a car or truck available to key employees — whether they be salespeople, service personnel, or management — can be a convenience for all and a wise investment in a key position. But it also increases your liability. Why? Here are a few of the most important reasons you may need better liability coverage.
1. There Will Be Personal Use
No matter what your policy about personal use is, expect that it will occasionally happen. Even well-meaning employees may sometimes resort to personal use of a company car, such as dropping off kids at school or using the car when theirs is in the shop. Rather than ignore this or try to police it too heavily, recognize the risks and adjust your financial protection from them.
2. You Have More Exposure
The higher your exposure to the public and on the road, the more chances there are for something to happen. Company vehicles that spend the after-hours sitting in a garage on your property aren't at high risk.
But when an employee has one full-time — especially with prominent company branding — it can get into trouble and it will draw more attention. Your branded vehicle in an accident while dropping off kids at school could end up on the front page of the newspaper. And that opens a huge can of worms for liability.
3. Employees Are Freer
With a company vehicle at their disposal, employees may divert from planned routes, run personal errands, or go back and forth to sites more often. The freedom to conduct business in ways that work best for them also benefits the employer they work for. But it means that the car may be on the road a lot more and that it's more likely to be somewhere you don't expect it to be.
4. You Have Ultimate Control
A company that reimburses employees for use of their personal cars has some liability for accidents during company business.
However, when you own the vehicle, you are ultimately responsible for nearly everything that happens with it. It's much harder to separate business use from personal use, maintenance is your responsibility, and the company is liable for the decision to put someone behind the wheel.
Where Should You Start?
All these added risk factors make your commercial liability insurance more important than ever. It doesn't mean you should never allow employees full use of company vehicles, but it does mean you should reevaluate your insurance coverage and limits. Start by meeting with a commercial liability insurance company in your state today.
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