Why it matters for your company
An engineer driving a personal car to a customer site is on company business. If they cause an accident, the injured party can sue the company, and the employee's personal auto policy may not be enough or may not respond.
Contracts that require auto liability usually accept hired and non-owned coverage from a company with no owned vehicles. It pays liability only; damage to a rental van is a separate question for the rental agreement or a hired physical damage endorsement.
Related terms
- Commercial autoThe policy that covers liability and physical damage for vehicles your business owns, leases or operates on public roads. General liability excludes autos, so a company vehicle needs its own form.
- General liabilityThe policy that responds when your business operations or products injure someone outside the company or damage property you do not own. It is the first line most contracts and leases require.
- Umbrella and excess liabilityBoth add limits above your primary liability policies. Excess follows the terms of one underlying policy, while an umbrella can sit over several and sometimes responds to claims the underlying forms leave out.