Getting behind the wheel of a company vehicle comes with its own set of rules and risks—especially regarding insurance coverage. If you’re involved in an accident, who pays for the damages? Does your personal auto insurance come into play, or is your employer on the hook? Navigating these questions is crucial to protecting your financial well-being and legal standing.
Here’s what you need to know about how accidents in company vehicles impact insurance coverage and liability, as explained by our West Palm Beach car accident lawyers.
How employer insurance covers company vehicle accidents
In Florida, businesses are mandated to carry commercial auto insurance for vehicles used in their operations. This commercial policy typically serves as the primary coverage if you’re involved in an accident while driving a company car for work-related purposes.
What does Florida commercial auto insurance cover?
Commercial auto insurance policies typically include the following coverages:
- Bodily injury liability coverage – Covers medical expenses for other drivers if you or one of your employees causes an accident.
- Property damage liability coverage – Pays for damage your company vehicle causes to someone else’s property.
- Drive other car coverage – Extends coverage to your business’ executive officers and their spouses when driving vehicles not listed on the company’s policy.
- Collision coverage – Helps pay for repairs or replacement if your business vehicle is damaged in a collision.
- Comprehensive coverage – Covers damage caused by non-collision events such as theft, fire, or natural disasters.
- Medical payments coverage – Pays for medical expenses for employees and their passengers after an accident, including treatments, rehabilitation, dental care, or funeral costs.
- Uninsured/underinsured motorist coverage – Provides compensation if you or your employees are injured in an accident caused by a driver with insufficient or no insurance.
- Hired and non-owned auto insurance – Offers liability coverage for business-related accidents involving personal, rented, or leased vehicles. However, this coverage does not pay for damages to the vehicle itself.
When personal auto insurance comes into play
Generally, your personal auto insurance policy does not extend coverage to vehicles owned by your employer. However, certain circumstances might prompt your personal insurer to become involved:
- Unauthorized use: If you’re operating the company vehicle for non-work-related activities without permission and an accident occurs, the employer’s insurance may deny coverage. You could be personally liable in such cases, and your insurance might not cover the incident.
- Insufficient coverage: If the damages from the accident exceed the limits of the employer’s commercial policy, the injured parties may seek compensation from you personally. Depending on your policy terms, your personal insurance might offer some coverage, but this is not guaranteed.
Understanding the legal and financial risks of company vehicle use
Recognizing that misuse of a company vehicle can lead to personal liability is essential. Engaging in unauthorized activities or operating the vehicle under the influence can result in the employer’s insurer denying coverage, leaving you responsible for damages. Additionally, such actions can have severe employment consequences, including termination.
How to protect yourself when driving a company vehicle
To safeguard yourself:
- Clarify usage policies: Ensure you understand and adhere to your employer’s policies regarding company vehicle use.
- Review Insurance coverages: Familiarize yourself with the extent of both your employer’s commercial auto insurance and your personal auto policy to identify any potential coverage gaps.
- Consider non-owned auto liability coverage: This optional endorsement on your personal policy can provide additional protection when driving vehicles you don’t own, such as company cars.
Crashed your company car? We can help.
Navigating the complexities of insurance coverage involving company vehicles can be challenging. If you’re involved in an accident while operating a company car, it’s advisable to consult with experienced legal professionals. The attorneys at Lytal, Reiter, Smith, Ivey & Fronrath possess the expertise to guide you through these intricate situations, ensuring your rights and interests are protected.
