Many employers provide employees company cars. Oftentimes, the employee is told that he or she need not worry about the insurance issues for this car; the employer will handle all of that. But this advice may be shortsighted since coverage gaps can crop up that may impact the insured employee in unforeseen ways. Thus, consider passing on the following tips to your clients who may have company cars.
Since your employer provides you a company car, consider the following risk management recommendations.
- Verify that corporate insurance is in place and that it provides primary coverage. Also, check the liability limits to confirm that they are adequate. Carefully adhere to any restrictions on personal use, including possible prohibitions of other drivers.
- For company cars, the extended non-owned coverage—vehicles furnished or available for regular use (PP 03 06) or related endorsement can be attached to your personal auto policy to provide excess liability coverage for these types of vehicles. A key advantage of this endorsement is its broad protection for co-employees.
- If you do not own an auto but do have personal auto exposure (e.g., company car, borrowing friends' cars, etc.), you should purchase a personal auto policy and attach a named non-owner coverage (PP 03 22) or related endorsement. Note that this endorsement could also be necessary if you need to purchase a personal umbrella policy.
- • Consider a personal umbrella policy that provides first dollar coverage (no deductible) if you do not have a personal vehicle but only a company vehicle.
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