Protecting Your Small Business and Employees from Auto Accident Liability
Whether you own a florist store in downtown Grand Rapids with one delivery truck, or a West Michigan pizza chain with dozens of delivery vehicles on the road each night, every business needs the protection of a commercial auto insurance policy. The following information explains why commercial auto insurance is so important and what every West Michigan small business owner should know to protect their business and employees when an auto accident occurs during business hours.
Who is liable?
If an employee is driving a company vehicle and is involved in an accident, the employer can be liable under the Owner Liability Act, even if the employee is not on-the-job. If the employee is on-the-job at the time of the accident, then an employer can be held liable for negligent acts committed by its employees while they were within the “course and scope” of their employment, regardless of the vehicle they are operating. Obviously, if the employee is driving the employer’s vehicle, and is in the “course and scope” of employment at the time, the employer can be liable for both reasons. The business owner’s Michigan auto/general liability insurance protects the employer and employee from claims and litigation filed against them.
If the employee is driving their own personal vehicle specifically for the employer’s business purposes, any damages would usually be covered under the General Liability policy of the company and the employee’s personal auto policy. Since a company vehicle was not involved, the employer’s auto policy would not be involved.
Can’t I just use my personal insurance policy?
Personal car insurance is not sufficient for most business owners, especially if you have employees or drive your vehicle mostly for business purposes. If your business involves delivery, transportation services, or meeting with clients daily, a commercial policy is your best source of protection. Commercial policies usually have higher liability limits than personal auto policies and most personal policies contain “business use” exclusions. Therefore, most insurers require vehicles that are to be used for business purposes, even if only part-time, to be insured under commercial auto policies.
What level of insurance will fully protect my business and employees?
The employer should have sufficient policy limits on any work vehicles with commercial insurance coverage as well as their General Liability policy. This way the assets of the company will be sufficiently protected from exposure. Most insurance agencies will add more than the statutory minimum for autos (20,000/40,000) for commercial vehicles. An umbrella policy is also recommended as an additional layer of coverage over and above any general liability and auto policies, in the event of a large loss.
To learn more about protecting you and your employees both before and after a Grand Rapids area auto accident, visit Grand Rapids Auto Accident Resource Center, where you can find valuable local tools including an auto accident checklist, Kent County accident statistics and protecting yourself from West Michigan uninsured motorists.
Steven Gursten, Partner
Michigan Auto Law
Michigan Auto Law is a third-generation law firm specializing in helping people who have been seriously injured or killed in car, truck and motorcycle accidents throughout Michigan. The firm’s Grand Rapids office is located at 220 Lyon St NW in downtown Grand Rapids.