Employee Crashed Their Car On A Work Errand
The situation: My employee caused a crash in their own car while running an errand for us. Now the other driver is claiming against my business. Are we covered?
Quick Answer
The employee's personal auto policy usually pays first. Your business can also be liable because the employee was working, and general liability policies typically exclude auto accidents. Hired and non-owned auto coverage, if you have it, is designed for this and generally pays above the employee's own limits.
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What Happened
Luis drove his own car to pick up supplies for the landscaping company he works for, and rear-ended another driver, causing injuries. His personal auto policy paid its $50,000 bodily injury limit. The injured driver's bills were higher, and the claim named the company. The company's hired and non-owned auto coverage responded to the rest, up to its limit.
Likely Relevant Policies
- Personal Auto Insurance (employee)
- Hired and Non-Owned Auto Coverage
- Commercial Auto Insurance
Potential Coverages
Employee's personal auto liability High likelihood
Personal auto policies generally cover some business use and typically respond first.
Hired and non-owned auto (HNOA) High likelihood
Designed for the business's liability when employees drive their own cars for work.
General liability Low likelihood
Typically excludes auto accidents.
Possible Exclusions
- Personal auto policies may not cover a car used primarily for business.
- HNOA generally doesn't cover damage to the employee's car.
Questions That Determine Coverage
- Was the employee driving for work at the time?
- What liability limits does the employee's policy have?
- Does your business have HNOA or a commercial auto policy?
- Is the car used mainly for business?
Recommended Immediate Actions
- Make sure everyone is safe and the accident is reported.
- Notify your business insurer right away.
- Get the employee's insurance details.
- Don't admit fault on the business's behalf.
Documents to Collect
- Police report
- Employee's insurance information
- Records showing the errand was for work
- Any claim letters received
Common Claim Process
The employee's auto insurer generally handles the claim first. Notify your business insurer of any claim against the business. HNOA, if you have it, typically responds after the employee's limits are used.
Potential Outcomes
- Paid by the employee's policy if damages are within its limits.
- HNOA pays the excess, up to its limit.
- Without HNOA, the business may face the excess itself.
Risk Prevention Tips
- Ask your agent about HNOA if anyone drives for work.
- Ask employees who drive for work about their liability limits.
- Keep a list of who drives for the business.
Frequently Asked Questions
Does workers comp cover my injured employee?
If your employee was hurt while working, workers comp may cover their injuries.
Does HNOA cover the employee's car?
Generally not; it covers liability to others.
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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 scenario describes how a loss like this commonly goes, not how your claim will be decided. Coverage depends on your policy's wording, limits and deductibles, your state, and the facts. Confirm specifics with your insurer.