Using a Personal Car for Business

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Here's what you need to know...

  • If you drive your personal car for business purposes, you may need to carry commercial insurance
  • Even if a company hires you solely to drive for them, if you own or lease the vehicle you’re driving, the insurance is your responsibility
  • A business cannot force you to insure a car that they own


It is important to understand that, when you are buying car insurance, business use usually isn’t covered under a standard policy. Many people don’t understand that, and they may be driving without coverage.

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Many people don’t purchase their insurance for their personal vehicle with the knowledge that they will someday use it for business.

If you unexpectedly find that you need to drive your vehicle to work for only a single instance, then you probably don’t need to worry about coverage.

If, however, you are using your vehicle for business on a regular basis, then it is time for you to consider your other insurance options.

Business Use and Independent Contractors

Business man with car

One of the most common mistakes that independent contractors make is not purchasing the right auto insurance for their vehicles.

An independent contractor is a person who is not directly hired by any company. This person may have his or her own business or strictly work from 1099s.

As an independent contractor, if you do work for a client, then you are responsible for your vehicle and anything that you do with your vehicle; your client is not. This misunderstanding is a common mistake.

They believe that if they are carrying a product or doing a service while using their vehicle, then the client becomes their employer and is responsible for their liability.

The truth is, as an independent contractor, you are responsible for yourself, period.

No one else is liable if you cause a car accident. Although other drivers can attempt to sue your client if you don’t have proper coverage, it is unlikely that they would have any success in their pursuit.

Commercial auto insurance is going to be a necessary expense to ensure that you are protected while you are working. Your insurance company has every right to refuse to pay any claims that you make if you cause an accident while you are performing your job.

Here are some independent jobs that you may not be carrying the proper insurance for:

  • Magazine or newspaper delivery
  • Pizza delivery
  • Massage therapist
  • Physical therapist
  • Long-term care technician

While this list is short, its diversity should help you to understand that nearly any type of work that you perform could cause you to need commercial auto insurance.

If you are on your way to see a client and you are carrying equipment for your work, then the insurance company can make the claim that you are using your vehicle for work purposes.

In addition, if you ferry around clients, such as a long-term care technician or a health care specialist might, then you need additional liability insurance to protect your clients.

Without the proper insurance, not only could your insurance refuse to pay your claim, but you could leave yourself open to a lawsuit as well.

Carrying commercial auto insurance rather than personal coverage might be more expensive, but the benefits far outweigh the risks to you.

Business Use and Your Personal Vehicle

Man driving rear

There are many companies that hire employees but require them to use their personal vehicle. In this case, it is still your responsibility to carry the proper amount of car insurance.

Business use of your vehicle for your employer doesn’t absolve you of your responsibility when it comes to car insurance.

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When you apply for a job with a company that requires you to use your own personal vehicle to do company business, they will require you to sign documents stating that you understand your responsibility in terms of auto insurance.

These companies are not required to provide you with money to pay for your insurance, nor force you to carry the proper amount of insurance.

There are some companies that provide you with a stipend to purchase your required auto insurance, but many don’t. In addition, some companies won’t hire you until you provide proof of commercial insurance to ensure that you have adequate coverage on your vehicle.

If, however, the company doesn’t provide you with a stipend or check to see if you have commercial insurance, they are still not liable if you cause an accident and don’t have the right insurance.

However, the chances do increase that someone could sue them successfully if the company directly employs you.

Business Use of Company Vehicles

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As a business owner, if you purchase vehicles for employees to use while doing business for your company, then you — not the drivers — are responsible for insuring the vehicles.

If you are working for a company that requires you to drive one of their vehicles, they cannot require you to pay for insurance for that vehicle. The exception is if the company leases the vehicle to you, much like a cab company might.

If you are hired for a job and the company tries to tell you that you have to pay for the insurance on company owned vehicles that you drive, then they are breaking the law.

The vehicle is registered in their name, making them responsible for paying for their own commercial insurance.

What is commercial insurance anyway?

Commercial insurance covers a vehicle that is used in the course of conducting business.

The reason that commercial insurance is separate from private insurance is because of the higher risks involved for companies and individuals who drive their vehicles for business.

Using your vehicle for business means more time on the road, which increases your risk of having an accident. In addition, commercial insurance may even cover the products that you are carrying if they are related to your business.

Your private insurance doesn’t offer this protection.

Lastly, if you are using your vehicle for business, your insurance company may require you to carry certain types of coverage depending on the type of vehicle you are using and what your business type happens to be.

For example, if you are carrying around passengers, then you will be required to carry more liability insurance.

Insurance companies have different types of commercial insurance for pick-up trucks, vans, trailers and so on. All of this will have an impact on your costs for your commercial auto insurance.

You can save money by ensuring that you have a good driving record. In addition, if you have employees, don’t let them drive your vehicle unless they have a good driving record as well.

With that being said, in order to save money on your commercial car insurance, you need to take a few minutes to get a commercial car insurance quote.

By using the free quote tool, you can get the information you need about your commercial car insurance right now.

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