Needless to say, car accidents are already a pain, but when they involve your business, they can turn into a full-blown nightmare. Honestly, it’s hard to strive for innovation and business success if your business is having to deal with lawsuits, payouts, and high premiums, right? Actually, a lot of business owners assume that as long as an employee has their own insurance, the company is in the clear.
But no, that’s entirely wrong. In fact, that assumption can cost thousands, if not more. Just generally speaking, the legal side of things gets messy fast, and if you don’t have your ducks in a row, you could end up footing the bill for something that was never supposed to be your problem in the first place.
Personal Cars Mean a Liability Disaster is Just Waiting to Happen
Okay, sure, it might seem harmless to ask an employee to drop off a package or swing by a client’s office in their own car. But if they get into an accident, guess who could still be on the hook? Yep, the business. So many businesses just don’t seem to understand this. But personal auto insurance typically doesn’t cover work-related driving, and that gap could leave your company open to lawsuits.
So, what’s the safest move here? Well, a company-insured vehicle that’s used strictly for work. No personal trips, no gray areas, no loopholes that could come back to bite later.
Letting Employees Use Their Own Car is Playing with Fire
Some business owners think they’re in the clear as long as their employees carry commercial auto insurance on their personal cars. That’s a gamble with bad odds. If an employee lets their policy lapse, has sketchy coverage, or runs into an insurance loophole, your business could still end up with a liability headache.
Even if you had nothing to do with the accident, lawyers love a good lawsuit, and they’ll drag the business into it faster than you can say “Not my problem.” If a vehicle is being used regularly for work, it needs to be fully controlled and insured by the business. End of story.
An Employee’s Weekend Joyride Can Become Your Problem
Some businesses allow employees to take company vehicles home. Now sure, that sounds convenient, right? Well, until your employee decides to take a little weekend road trip in it. If they get into an accident while picking up a pizza on a Saturday night, your business could be held liable. If a company vehicle is being used, it should be for work. Period.
No personal errands, no borrowing the truck to help their cousin move. Just work. Sure, that’s inconvenient to your workers, but again, liability is everything.
Hired and Non-Owned Auto Insurance Has More Holes
Some businesses try to cover their bases with hired and non-owned auto insurance. Yeah sure, it’s better than nothing, but it’s like using an umbrella with holes in it, well, it’s not going to keep you dry when the real storm hits. So, these policies have strict limitations and won’t cover everything, especially when it comes to employee-owned cars. Plus, they don’t give you control over what your employees are driving.
Just think about it; if someone’s car is a barely-running clunker with bald tires, and they get into an accident while making a delivery, your business could still be in the hot seat.
A Driver’s License Doesn’t Mean Someone is a Good Driver
So, this might be a hot take, but just because an employee has a license does not mean they should be trusted behind the wheel of a company vehicle. There are plenty of people out on the road you probably question right? Like how did some of these people even get a license?
Well, businesses need to have clear driving policies and actual training in place. You can have bad drivers and not even realize it. So, just think of it this way; a bad driver with a company logo slapped on the side of their car is a lawsuit waiting to happen. If an employee is reckless, distracted, or has a history of fender benders, the business is the one that ends up paying the price. Now, it’s probably obvious, but proper training and clear policies are non-negotiable.
The Right Insurance Saves More Than Just Money
Having business auto insurance is not just nice to have, but you really need to see this as a must. It really doesn’t matter how small your business is either, it’s something you need to have if you have a company car or even a small fleet for your business. Just think about it this way; one bad accident can drain a company pretty fast (and horrible too).
But with that all said, the right coverage ensures that if things go south, the business doesn’t crumble under the weight of lawsuits and repair bills (which is a sad reality). Not all policies are created equal, though (but the same can be said for commercial car insurance companies too). Business owners need to make sure they’re not settling for the cheapest option that barely covers anything. Basically, cutting corners on insurance isn’t going to end well, so you’re better off realizing that now.
Maintenance is Never Optional
Yes, even the best insurance policy won’t help if a company vehicle is in bad shape at the time of an accident. If faulty brakes or worn-out tires are to blame, the business could be looking at serious legal trouble.
As you already know, vehicles need to be regularly checked, maintained, and serviced. Ignoring maintenance to save a few bucks today can cost thousands in legal fees tomorrow. So, having a well-maintained fleet isn’t just about looking professional; it’s about keeping liability at bay (and it’s hard to win a case when cutting corners on this).
Your Employee Handbook Should Be Air-Tight
Seriously, this is something that a lot of businesses surprisingly neglect! Well, having policies is one thing. But making sure employees actually read, understand, and follow them is another. If company vehicles have specific rules, they need to be in writing, and every employee who gets behind the wheel should sign off on them.
Now, this isn’t just about accountability (that’s just a part of it), but it’s about having legal protection when something goes wrong. A verbal “oh, I thought it was fine” won’t hold up in court. A signed document? Well, that’s a different story.
