Understanding who is covered by your commercial auto policy can be tricky. The list of questions can go on for a long time. Does it matter that employees only drive for business once a month? Does every employee need to be listed on the commercial auto policy? Are runs to the bank considered driving for business? What if the company doesn’t own any vehicles? How do you decide when to add someone? That’s what I’m here for!
1) Evaluate the Frequency Each Employee Drives for Company Business
Example A: Jane’s Dry Cleaners of Denton has 4 vans on their commercial auto policy. The vans are use to make runs for pick-up/delivery services. Jane’s employs 22 people but only has 6 drivers on their commercial auto policy. 4 employees are regular drives and 2 fill-in when others are out. Jane’s doesn’t need to include the other 16 employees since they don’t have access to the vehicles.
Example B: Fast Pizza of Frisco is rapidly growing. Over the last 2 years their business has increased 250%. They are constantly hiring new employees to keep up with the demand for pizza deliveries. Fast Pizza leases 7 custom wrapped vehicles that any employee can use. They need to make sure their employees are covered while driving for them, so their entire staff is listed on their commercial auto policy.
2) Find Out What the Carrier Requires
Example A: Auto Insurance for Your Business extends coverage to all W-2 employees. Paul’s Plumbing Services has 3 trucks. Paul’s only keeps 2 drivers listed on their commercial auto policy. A non-listed driver is in a hurry to get to their next appointment and hits a parked car. Auto Insurance for Your Business covers the claim with no questions asked.
Example B: By the Books Auto Insurance will only offer coverage to those employees listed on the policy at the time of a claim. Jane’s Dry Cleaners of Denton forgot to add a new new regular driver. That driver was texting and driving and totaled the van. By the Books Auto Insurance can deny the claim because of how their policy is written.
3) Do Employee’s Have a Personal Auto Policy
Example A: Chuck in a Truck General Contractor furnishes their Sales Team with company trucks. Chuck is very generous and allows the team to use the vehicles after hours. Employee Josh uses this as his personal vehicle and allows his wife to drive too. The couple do not have another vehicle so there’s no need for them to have a personal auto policy. Chuck adds Employee Josh’s wife to the commercial auto policy, with a special endorsement.
Example B: Gary works at High-End Auto Dealership. They allow Gary to drive whatever car he likes after hours. High-End’s commercial auto policy doesn’t require all drivers be listed. Gary’s wife just purchased a vehicle from the dealership and insured it with Local Auto Insurance Agency, but sometimes she drives Gary’s company car. Since the dealership’s policy doesn’t require all drivers to be listed, there is no need to add Gary’s wife to the commercial auto policy.
I hope that made things a little more clear. If you have any questions, feel free to reach out to me.
Thanks for reading!
Flower Mound, TX 75022