Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Some types of professions can drive clients with just their personal auto insurance in place
  • Uber and Lyft drivers should have supplemental policies
  • If you’re driving for your employer, they may have the required liability plans in place already

There are many times when an employee may transport a client. You could be asked to pick someone up at the airport or you might be a realtor who routinely lets people ride along to look at different houses.

You need to know whether this passenger will be covered in the event of an accident.

It’s important to protect yourself by learning more about the following:

  • the law
  • what your policy actually includes
  • what your options are

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Commercial Policy Required in Certain Cases

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There are some situations where a business policy is actually required. A good rule of thumb is what the car’s primary use is.

Insurers have their own guidelines regarding what cars should be covered by a commercial plan, so you should be honest and upfront with your provider about the likelihood of transporting clients.

Additionally, you should have a special commercial plan if:

  • The cars are owned, leased, or hired by the business
  • The car is used primarily to transport good or clients on behalf of the business

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Required by the Employer

Businesses can make driving clients a condition of employment, but they’re required to assume additional responsibilities when they do so.

  1. The first is that they’re expected to reimburse employees for expenses related to driving people around. This reimbursement includes gas, insurance expenses, and increased maintenance requirements.
  2. The second is that they’re required to take over any liability involved with driving that client. For example, if you work in a group home and you use your own car to drive a client to the doctor’s office, your employer would wind up being held responsible if you were involved in a car accident while on the road.

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Some Industries have a Green Light

In general, a car that’s used to transport clients should have commercial coverage on it, but there are some exceptions to this rule.

For instance, Mary Kay, Avon, and Tupperware consultants are allowed to use their cars to build their business as long as it’s not their primary occupation.

Your particular plan may have a mileage limit of 500 miles per week for this type of business, so you should talk openly with your agent.

Realtors, lawyers, accountants, clergy members, consultants, and doctors who routinely drive clients around may typically do so with their personal policy.

Again, you’re encouraged to speak with your agent to be sure that you’re covered. There may be a slight increase in rates if you normally have extra people in the car with you.

If your plan will have a noticeable jump in premium, then you can shop around for a more affordable option.

Uber and Lyft Drivers Need Special Coverage

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People who enjoy driving are making extra money by turning their private car into an informal taxi for hire, but this can cause serious problems with the insurance companies.

Currently, many personal auto policies do not cover drivers for this type of activity. The moment that a person slips into the passenger seat for a paid ride, the car is considered commercial and will fall under a different insurance plan.

The good news is that you don’t necessarily have to get an entirely new plan to ensure that you’re covered.

You can still have your personal insurance for the private use of your car, and a supplemental plan could be put in place for the business activities. There is an extra cost associated with them, but this type of liability plan is required by both Uber and Lyft.

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Liability Concerns for Employers

There are also some important liability concerns for companies when employees are transporting clients.

Even if an employee is stopping to run errands on the way home, it may be possible for a court to find the company liable if the employee was required to use a personal car throughout the day for company business.

Companies can protect their assets and interests by:

  • Giving employees the option of using their own vehicle or not
  • Asking employees to provide them with proof of insurance to confirm adequate coverage
  • Implementing a “Personal Vehicle Use” policy that clearly defines company expectations, what will be allowed during company time, and reserving the right to revoke an employee’s right to drive a personal car on company business
  • Requiring employees to give written permission from the company before using their car on corporate business
  • Explicitly notifying employees that the company will not be held liable for damages, tickets, or citations that occur while the employee is on the road during business hours

As an employee, you should be aware of the potential liability concerns associated with driving clients around. Talk with your insurance company to be sure that you’ll be covered.

If you find that it will carry a slight premium, then you can shop around for a better plan. By law, companies have to reimburse you for use of your personal vehicle, so keep track of your receipts and mileage so that you can submit the reports.

As an employer, you can be held liable for damages above and beyond what the employee’s personal plan will cover.

Look into supplemental plans that will cover an employee driving a personal car. Check out different companies to find the one that’s right for you, or consider having your employee increase their own limits and then reimburse them for the difference.

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