Do I Need Business Insurance on My Car?

(Get all your answers from an expert and find the coverage you need.)
Written by Ashley Surinak
Written by Ashley Surinak

Insurance doesn’t have to be boring. That’s why we hired Ashley Surinak to be our BA insurance writer. Ashley specializes in making mundane subjects hella-entertaining.

paul martin Reviewed by Paul Martin
paul martin
Reviewed by Paul Martin

Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.



When do I need business insurance on my car?
What is the biggest issue with business insurance on my car?
If I don’t own or use a car in my business, could I still need auto insurance?
What is vicarious liability?
Expert(s) Found on this Page

When do I need business insurance on my car?

Sometimes I need an employee to run an errand or do something for the business, and we use my car for that. I’m curious whether I need business insurance on my car, even if I do this infrequently. 

This is a loaded question because auto insurance is a different beast from what most business owners expect. We’ll explore why that’s the case in the following questions, but know this as a general principle: If you own a car and you’re using that car in the business, you absolutely need business insurance on the car. 

Of course, the amount of coverage on that vehicle (or vehicles) may vary depending on how often the car is used and various other factors. That’s something you’ll want to discuss with your independent insurance agent.

What is the biggest issue with business insurance on my car?

Now that I understand when I need business insurance on my car, my next question is what issues I need to be concerned about regarding using my car in the business. Should I be worried? And if so, what about?

The single biggest issue to keep in mind with business insurance for a car is ownership. Auto insurance is set up with ownership as the biggest issue because of vicarious liability. We’ll talk about vicarious liability a bit further down the page in more detail, but just know for now that it means you’re generally held responsible for any damage or injury caused by an employee who is using your car for a work-related task or errand.

That being said, if you’re the owner of the car and the car is being used in business, you should always be concerned about liabilities. However, you don’t need to be concerned if you work with a independent insurance agent to ensure you’re covered should anything happen. 

If I don't own or use a car in my business, do I still need auto insurance?

I don’t use a car in my business (ever). Do I still need auto insurance?

It sounds absurd, but the answer is yes. 

Let’s tackle this one with an example. Assume you own a restaurant and it’s really popular. That restaurant has a drive-thru that causes congestion on the street outside of the entrance because so many people are trying to get in. The issue is that if this congestion causes an accident, an injured person may sue you because of your restaurant operations. Because of this, you could still have auto liability exposure even if you aren’t using a car in your business.

Even if you don’t use a car, think about scenarios like this. Doing so is the best way to protect your business from any unforeseen liabilities. 

What is vicarious liability?

I get the general premise of vicarious liability, but can you explain it in a bit more detail?

Vicarious liability is legalese for you being responsibility for some kind of damage or injury that you didn’t personally commit but are being held liable for. This happens when an employee causes damage or injury using your car.

However, vicarious liability doesn’t mean that you’re responsible without any questions asked. The employee had to have been acting in the scope of employment (i.e. doing what they were supposed to be doing with your car) at the time of the accident. Otherwise, the employee will be held responsible and you won’t. 

The law is a bit more complicated than what I’ve said here, but you get the basic idea. And because you could be held liable for your employee’s wrongs, auto insurance is almost always a good idea.

Now what?

An independent insurance agent can help you answer all your questions about your business, your car, and the insurance you need to cover both. If you'd like to read more about commercial auto insurance, click here >

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