In today’s fast-paced business world, many companies — especially small to mid-sized ones — depend on employees to use their own cars for work. Whether it’s a quick supply run, a client meeting across town, or regular job site visits, the convenience of using personal vehicles often outweighs the cost and management of a company-owned fleet.
But while this may seem like a practical solution, it comes with a dangerous blind spot: if your company doesn’t carry non-owned auto insurance, you’re leaving yourself wide open to potentially devastating liability in the event of an accident.
What Is Non-Owned Auto Insurance, and Why Should You Care?
Non-owned auto insurance is a critical safeguard that provides liability coverage for businesses when employees drive their own vehicles or rent cars for business purposes. While this policy does not cover physical damage to the employee’s or rental vehicle — that’s handled by their personal or rental insurance — it does protect your business from third-party claims for bodily injury and property damage if an accident occurs.
Typically added as an endorsement to a commercial general liability or commercial auto policy, non-owned auto insurance is essential for businesses that:
- Have employees use their personal cars to meet with clients or run business errands.
- Require staff to rent cars while traveling on company business.
- Use part-time or temporary workers who rely on their own vehicles for work duties.
- Employ delivery drivers who do not operate company-owned vehicles.
Don’t Rely Solely on Personal Auto Insurance
Many business owners assume their employees’ personal car insurance will cover everything. That’s a costly mistake.
Here’s the reality: while personal auto insurance is usually the first line of defense in an accident, most personal policies have serious limitations when it comes to business use. Some policies explicitly exclude coverage for work-related driving. Even when they don’t, the coverage limits are often the bare minimum required by the state — far too low to cover a serious accident.
Let’s say one of your employees rear-ends another vehicle while driving to a client meeting. The crash results in serious injuries and a lawsuit. If the employee’s personal auto policy has a $25,000 liability limit (as many do), and the damages are $200,000, guess who’s next in line to pay?
Your business.
That’s where non-owned auto insurance steps in — as excess liability coverage. Once the employee’s personal limits are maxed out, this policy picks up the rest. Without it, your company could be responsible for the remaining balance — including attorney fees, court costs, medical bills, and damages.
The Real-World Risks of Going Without Coverage
Operating without non-owned auto insurance isn’t just risky — it could be catastrophic.
Here’s why:
- Lawsuits Are Inevitable: If an employee causes an accident on company time, your business will likely be sued. Plaintiffs and attorneys target employers, knowing companies typically have more assets than individuals.
- Judgments Can Be Massive: A single injury lawsuit can easily reach six or seven figures. For a small or mid-sized business, that can mean bankruptcy.
- Insurance Gaps Are Common: You may assume the employee’s policy is enough — but if that policy excludes business use or offers low coverage, you’re exposed.
- Rental Vehicles Aren’t Covered Either: If your employees rent vehicles for business trips and decline the rental company’s insurance (as many do), your business is at risk for liability claims if there’s an accident.
What Can You Do to Protect Your Company?
If your employees ever drive for work — even just occasionally — you need to take proactive steps:
- Add Non-Owned Auto Coverage Now
This is one of the most cost-effective additions to your insurance portfolio. It’s usually very affordable and easy to include as part of your general liability or commercial auto policy. - Set Minimum Personal Auto Limits for Employees
Require employees who drive their own vehicles for business to carry higher-than-minimum liability limits — such as $100,000 per person/$300,000 per accident. If they’re driving on your behalf, their low limits put you at risk. - Create a Vehicle Use Policy
Clearly define when and how employees may drive for business purposes. Set expectations around insurance requirements, safe driving practices, and accident procedures. - Educate Your Team
Make sure employees know what to do if they’re in an accident while driving for work. Provide clear guidance on reporting procedures, documentation, and insurance claims.
Don’t Wait Until It’s Too Late
If your business allows — or even expects — employees to use their personal cars or rental vehicles for any work-related tasks, non-owned auto insurance is not optional. It’s a critical shield that could save your company from financial ruin in the wake of a serious accident.
Remember: your employee may be behind the wheel, but your business is riding shotgun. Without proper coverage, one wrong turn can lead to costly lawsuits, damaged reputations, and permanent closure.
Need Help Protecting Your Business? Turn to the Experts.
BGES Group is one of the New York Tri-State Area’s leading construction insurance specialists, proudly serving businesses throughout New York, New Jersey, and Connecticut.
We understand the unique risks construction and contractor firms face — including the hidden exposures like non-owned auto liability. We’ll review your current coverage, identify gaps, and tailor a plan that fits your operations and budget.
📍 Contact BGES Group Today:
Phone: (914) 806-5853 – Gary Wallach
Email: bgesgroup@gmail.com
Website: www.bgesgroup.com
Don’t leave your company vulnerable. Let BGES Group help you drive safely into the future.