Does your law firm have a business auto insurance policy?
It should, if there are vehicles registered under your law firm’s name. The policy could also cover your firm when you or your employees use a personal or rented vehicle for firm errands, deliveries and other business purposes.
In fact, business auto coverage could be your firm’s single most important asset in the event of an accident.
“Running a business creates risk,” says attorney Dennis Beaver, who writes the syndicated column You and the Law, in this Kiplinger article. “These risks are amplified when family members or employees use their own vehicles on the job. Have you ever sent a worker on a quick trip in his own car to the post office or the bakery to pick up an employee birthday cake? You may have just opened your business up to some serious liability.”
How Would You Answer This True/False Question?
Question: “There’s no need to obtain business auto insurance as long as personal vehicles are only used occasionally for business-related matters such as picking up clients from the airport or making deliveries of things like contracts or other documents, right? Won’t the personal auto policies provide sufficient coverage?”
“If you said ‘true,’ you could be in hot water one day,” writes Beaver. “It is critical that employers understand the risks they are exposed to when employees use their own vehicles for company purposes. This starts with being aware of the typical limits of liability with personal auto insurance. Most personal insurance liability policies are small, with lots of people only having their state’s minimum limit. Those limits don’t come close to what would be needed to cover any significant injuries.”
Some other considerations Beaver highlights:
- The employee’s personal policy might exclude accidents that occur while the vehicle is being used for the benefit of the employer. If that happens, both the employee and employer may be sued, unless the employer has adequate limits of business auto coverage.
- Employees who drive their own car to work are covered by their personal auto policy. But if they deviate from their usual route at their employer’s request – say to pick up lunch for the office staff — then the primary carrier should be the business insurance, not the personal policy.
- Experts recommend a minimum of at least $100,000 per person for bodily injury coverage, and $300,000 per accident, and property-damage coverage of $50,000, or a minimum of $300,000 on a single-limit policy.
- Uninsured/Underinsured coverage – with sufficient limits – is essential.
- Medical payments coverage is critical. It might pay for treatment and diagnostic tests that private medical insurance may deny. And it’s quite inexpensive.
Lawyers Insurance Agency is a subsidiary of Lawyers Mutual, which is the only legal professional liability insurance company that has been protecting North Carolina lawyers continuously since 1977. Get a free quote on Business Auto Insurance today.