Does Personal Auto Cover Business Use?
Your personal auto policy provides coverage for some business use of your vehicle. Similarly, your employees’ personal auto policy covers some business use of their vehicle too.
A personal auto policy is unlikely to provide coverage, however, if the vehicle in question is used primarily in business. It will not provide coverage for any vehicle owned by a business. The personal auto policy, whether yours or your employee’s, may not have enough coverage to protect your business.
For example, imagine you are driving your car to a business meeting while having an intense conversation on your cell phone with one of your sales reps. By the time you notice the van ahead of you has stopped to make a left turn, it’s too late to avoid a collision. The driver and five passenger are in the accident. They sue you and your company. If you only have a personal auto policy, your insurer will probably defend you personally and pay the claim -- up to the policy limit. Your personal auto policy insurer will not defend or pay damages on behalf of your business, however.
For a very serious accident or one with a number of injured people, your personal auto policy may not be enough to cover the damages. In that event, the injured parties would likely sue to collect damages from your business.
If you or your employees are driving personal vehicles for business and relying on your personal auto policies, be sure everyone has sufficient liability coverage to protect your business in the event of a serious auto accident.
Do not expect to rely on a personal umbrella policy for any claims that arise from business use of a vehicle. Typically the personal umbrella excludes all claims occurring in the course of a business endeavor.