Wednesday, October 12, 2016

The Use of Personal Vehicles for Business

Did you know that there are over 240 million registered motor vehicles in the United States? Of those vehicles, approximately 25% are used for business purposes. As a business owner, its important for you to understand how the use of personal vehicles could affect your business. If you have employees that use their personal vehicles for business related activities, you could be exposing your business to a significant liability risk. In today's blog, our Lake of the Ozarks insurance agency discusses these risks and what you can do as a business owner to reduce your risk.

Personal Auto Policies 

Everyone is required to have auto insurance on the vehicles that they drive. However, personal policies have limitations when it comes to business use. In the event of a serious accident during business use, the business owner could be sued to collect additional damages not covered by the personal policy. Encourage your employees to talk to their Lake of the Ozarks insurance provider to be sure of their coverage, and also to let their agent know how the vehicle will be used for business. As the business owner, its important that you know the coverage your employees have on their vehicles. 

"Business Use" 

What exactly is the definition of business use? What does it mean? Activities that constitute are considered "business use" can include visiting customers, picking up supplies, attending conferences, and driving to and from work. For activities like this, a personal auto policy may provide the coverage needed. However, the exception is livery, or the carrying of goods or people for a fee. In this case, additional coverage may be needed. The best course of action is to talk to your insurance agent at the Lake of the Ozarks to make sure that you, as a business owner, understand your risk and are aware of any additional coverage needed.

Reduce Your Risk 

1. Use and Enforce a Company Policy. 

Every business needs to have a driving policy that is clearly communicated to every employee. While it may be common to have a policy against driving while under the influence or driving distracted, such as using a cellphone, reminding your employees of these policies is one of the best ways to mitigate risk. 

2. Review Employee Driving Records and Develop an Approved Driver List. 

Any employees driving for business related activities should be required to provide proof of a driver's license, a copy of their personal insurance coverage and proof that the insured has declared the vehicle for business use to the insurance agent. In addition, business owners should check the driving records of those employees that will be using their vehicles for business use. This process should be used to develop an approved driver list.

3. Establish Maintenance Standards for Vehicles. 

While its important that you have a safe driver behind the wheel during business activities, its also important to know the vehicles being operated for business use are also safe. As a business owner, you'll want to make sure any drivers have their vehicles inspected and maintained regularly. Consider regularly collecting maintenance reports from employees to gauge the reliability of their personal vehicles.

4.Review Your Commercial Auto Policy. 

It is also important to review your existing business auto policy and make sure you have adequate limits, as well as the correct coverage types.  Hired and Non-Owned Auto Coverages are a must for businesses with any potential employee or owner driving exposures. This gives coverage to the business for non-owned autos, such as employees running errands or hired vehicles that are not titled in the company name. This coverage does not protect the employee, as they need adequate coverage and limits on their personal auto policy; however, it does protect the business when they are brought into the liability suit when the employee was driving on the company's behalf.  If you don't have a commercial auto policy, these coverages can normally be added to a business owners policy or commercial liability policy as an endorsement, but the best place for this coverage is under the auto if available.  

If you have questions regarding the risks of your business, whether it be in relation to the use of personal vehicles for business or another issue, give Insure the Lake a call at 573-348-2794. Our independent insurance agents at the Lake of the Ozarks are here to help with all your business and personal insurance needs. Make sure you're covered by reviewing your policies today!

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About the Author: Steve is a double back-flip insurance ninja. He was named Young Insurance Agent of the Year by the Missouri Association of Insurance Agents in 2010 and is a Certified Insurance Counselor. When he is not helping customers, he enjoys community service, Latin dancing with his beautiful wife and going on adventures with his two awesome sons.

Steve Naught, CIC
3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral