Your employee ran an errand in her own car. The claim can still reach your business.
She was on her own insurance, in her own vehicle, and she caused the accident. The person she hit will name the employer anyway, because the trip was for the business. Whether anything of yours answers that claim depends on a cover most small businesses have never heard of.
Build the fleet file The short answerThe driver’s own policy, up to whatever limit they happen to carry
Above that limit, or when the claim names the business directly
Non-owned automobile liability. Rarely automatic, usually cheap
Is my business liable when staff drive their own cars for work?
It can be. A business that sends someone on a work trip can be named in a claim arising from that trip, even though it owns no vehicle and employs no drivers. The employee’s own policy responds first. The exposure that reaches the business is what sits above that limit, and a claim that names the company on its own.
This is not an unusual arrangement. It is the bank run, the supply pickup, the drive to a client, the dropped-off deposit. Most businesses do it every week and have never counted it as driving. The insurance question does not turn on whose name is on the registration. It turns on whose business the trip was for.
An employee carrying a modest liability limit is common. A serious injury claim is not modest. The difference is the part that comes looking for the business.
Neither one is the other.
Their policy
Covers the driver and the vehicle. Its limit is whatever they chose, and you have no say in it and usually no idea what it is.
Non-owned automobile liability
Sits on the business policy and answers when the business is drawn into a claim about a vehicle it does not own. It is an extension that has to be arranged, and it is one of the least expensive things on a commercial policy.
Three arrangements that create it without anyone deciding to.
The occasional errand
Nobody is employed to drive. Someone collects supplies, drops a deposit, or takes a document across town. It happens a few times a month and it never gets discussed as driving.
Mileage being reimbursed
Paying someone per kilometre is a clear record that the trip was for the business. It is good practice for payroll and it is also the paper trail a plaintiff’s lawyer reads first.
Delivery by staff or contractors
A shop that started delivering, a clinic dropping off samples, a trade sending an apprentice for parts. Delivery changes how a vehicle is used, and that is a rating question for their policy as well as an exposure question for yours.
What owners ask us about this.
We only ask people to drive occasionally. Is it really an exposure?
Frequency affects how likely it is, not whether it exists. One trip is enough for one accident. The reason this cover is usually inexpensive is precisely that the frequency is low – which is a poor argument for going without it.
Should I be checking my staff’s own insurance?
Many businesses ask to see it, and some make a minimum limit a condition of driving for work. That is an employment and policy decision rather than an insurance one, and it is worth thinking about alongside the cover rather than instead of it.
Does this apply to contractors and casual helpers too?
Often yes. The question a claim asks is who the trip was for, not what the person’s employment status was. Businesses that use casual help are frequently more exposed here, not less.
What if the employee was running a personal errand on the way?
Then it gets argued about, which is itself expensive. The detour is a classic point of dispute, and the cost of arguing it starts long before anyone decides who was right.
We have commercial vehicles already. Are we covered for this?
Not automatically. A policy covering vehicles you own does not necessarily answer for one you do not. This is a specific extension and it is worth confirming rather than assuming, because the wording is where it lives.
Not the question you had? Build the fleet file and set out your own situation in plain words. A licensed broker reads it and replies in writing.
Tell us who drives, and whose car it is.
We will tell you whether your current policy answers when a staff vehicle is involved, and what it would take to close it if it does not. Next business day, and usually the same day.