Non-Employee Use of Fleet Vehicles

Non-employee personal use of a company’s fleet vehicle comes with multiple risks, and businesses may wish to implement policies to prevent this practice. Understanding the hazards and liabilities and how insurance may not cover these situations is essential.

The experienced team at Bone, Robertson & McBride Inc. Contact us today for more information.

What Is Commercial Auto Insurance?
Whether your business permits or prohibits personal non-employee use of company vehicles, it is essential to review your commercial auto insurance policy. Commercial auto insurance generally provides coverage for vehicles owned by a business and specified employees. Like a personal auto policy, it may provide coverage for liability, collision, comprehensive insurance. white commercial fleet

Does Commercial Auto Insurance Cover Personal Use of a Business-Owned Vehicle?
Depending on your insurance and your company policies, some companies allow employees to use business vehicles for personal use. Insurance policies usually contain language on who is an “insured,” meaning the policy will only cover specific individuals (e.g., employees). What if the employee’s spouse or another family member is using the car for personal use? If a non-employee drives a business-owned vehicle, commercial auto insurance coverage may not extend to their use. For example, if an employee’s family member uses the company car for a quick errand and that individual is not an “insured” per the policy, commercial auto coverage would not apply.

Exclusions may also prevent the employee’s relative in this example from receiving coverage from their personal auto policy, and the individual may need to secure extended non-owned coverage to fill in this gap.

Other Considerations
Aside from the insurance implications of allowing non-employees personal use of company cars, there may be risk management or loss control strategies to consider. For instance, you may wish to have a company policy that states acceptable uses of company vehicles, mileage limitations, who is covered and what are considered safe driving habits.

Additionally, other reasons to consider prohibiting non-employee use of company vehicles may include:

It increases a business’s risks; for example, you would not have the proper documentation to vet potential drivers.
Additional insured drivers may require a higher policy limit, likely resulting in an increased premium.
Family members such as teenage drivers with little experience driving may use the vehicle, increasing the risk of accidents occurring and claims for the company.
The additional use increases wear and tear on the automobile.

The above list is not all-inclusive, and there may be additional hazards associated with non-employee use of company vehicles. Consult with your Bone, Robertson & McBride broker for more information. We can also discuss your other insurance needs.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information by visiting our website or giving us a call at 800-510-1095.

Non-Employee Use of Fleet Vehicles

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