Q. We often send employees on assignments to other locations and those employees drive their own vehicles. Should we provide liability insurance on our employees’ vehicles in case of an accident? — D.R., New York
A. We advise employers not to purchase liability insurance for employees who use their own vehicles on company business. Most states require citizens to carry some level of minimum auto coverage, so the employees already are covered.
Plus, purchasing insurance will only create an unnecessary cost for your company, and would further suggest that your company is jointly responsible for any liability that results from the employees’ actions. That is the opposite message that you want to send. You want to make clear the employee alone is responsible.
That said, you can take other steps to help minimize the risks and ensure that employees are safe drivers. For example, right after you hire and periodically thereafter, have these employees provide proof of insurance coverage and run a check of their driving records.
Employees also should acknowledge in writing at the outset, and periodically thereafter, that (1) they are insured consistent with the state’s laws, (2) they have a valid driver’s license and (3) the company has not provided them with automobile insurance of any kind. Finally, these agreements should state that the employees understand that they are solely liable for any claims arising out of the use of their personal vehicles while on company business.