Employees Driving Their Own Cars for Work: Who's Liable?
Learning goal: Know why a business can be liable when an employee crashes on an errand, and what hired and non-owned auto coverage is for.
Short answer
Your business can be. Triple-I says that if employees drive their own cars for business and cause a crash, your business could be liable for the injuries and damage. The employee's own auto policy usually responds first, but its limits may be low, which is what hired and non-owned auto coverage is for.
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The Fuller Picture
Small businesses often have no company cars, so it's easy to assume auto insurance isn't their concern. But an employee running to the bank or visiting a client is driving for the business. If the employee causes a serious crash, the injured people can look to the business as well as the driver.
Key Takeaways
- Triple-I: "If your employees drive their own cars for business purposes—to visit clients, for example—your business could wind up liable for property damage and bodily injuries."
- Employees' personal auto policies "cover some business use of their vehicles too (depending on the type of business)," per Triple-I.
- "If a vehicle is used primarily in business, there is likely no coverage under a personal auto policy."
- For owners and employees using personal cars for work, Triple-I says "you may need hired and non-owned auto insurance (HNOA)."
- A general liability policy typically excludes auto accidents, so it doesn't fill this gap.
Real-World Example
A bank run that went wrong
Jen, who works at a small design studio, drives her own car to deposit checks and runs a red light, injuring another driver. Her personal auto policy pays first, up to her state-minimum limits. The injured driver's bills exceed those limits, and the claim names the studio too, since Jen was working. The studio's hired and non-owned auto coverage responds to its share, above Jen's policy, up to its limits.
Common Mistakes
- Assuming no company cars means no auto liability for the business.
- Assuming the employee's personal policy limits will be enough.
- Expecting general liability to cover a car crash.
Interactive Exercise
Map your work driving
Take ten minutes to list each kind of driving done for the business.
Tick each step as you do it. Your checklist is saved in this browser.
Knowledge Check
Question: An employee crashes their own car while visiting a client. What usually pays first?
Recommended Insurpedia Tools
- Coverage Builder: Answer a few questions about your home, vehicles, family and work, and see insurance topics worth researching for your situation, each linked to a plain-English explanation. It doesn’t tell you what to buy.
Related Insurance Terms
Related Scenarios
Questions to explore next
Questions readers often ask next about this topic:
- Do I need hired and non-owned auto coverage?
- Does my employee's policy cover business errands?
- What's the difference between commercial auto and HNOA?
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The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- Insuring your business: business vehicle insuranceInsurance Information Institute (Triple-I)
Educational information, not advice: This lesson is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers. The business vehicle points come from Triple-I.