What is the company's responsibility when asking employees to run business related errands?

Question

I have couple of questions and concerns about this kind of situation. I have been driving to run errands for my company. I wonder if it is worth the risk even though they are reimbursing me for mileages (even though I had to ask for it). Should I maybe ask them to find an alternative method anyway?

1.) What will happen if there is an accident when an employee driving his/her own car to run company’s errands?

2.) What will happen in the event when an employee borrows another employee’s car to run company errands?

3.) Will it affect a personal insurance rate if an insurance company knows that you use your car to run errands for your company? If so – would it be fair to ask the company to cover the difference just to be safe?

4.) What is or should be a fair policy for this kind of situation for both company and employees?

My company has an auto insurance policy but it only covers liability. If anyone can help me with this, I’d really appreciate it.

Thanks!

Answer 1

First off, your company does this to save money by NOT purchasing a "company vehicle."

1) If you have an accident while in the persuit of your company's business, YOUR insurance company will be primary and will have to pay for damages and your company probably has a coverage to provide higher limits in the event of an accident. If an attorney gets involved, during the investigation, you will be asked "Where were you going when the accident happened?" and if you answer "To the bank for my employer", the company gets brought in for the DEEP POCKETS.  Your company will represent you, then they will probably either CANCEL you or increase your premiums since you are using your car "for business purposes" - which will increase YOUR insurance rates.  Is your company going to PAY for the INCREASE??

2) Now you have TWO employees involved - (see #1 above) and will your friend's car coer YOU while you are driving??

3) Depending on your State, some companies have a Class 3 rate which is a personal auto policy but the car is used for business persuits.  Your company SHOULD reimburse you for the insurance increase - but maybe they think that by paying you mileage, it should cover it.  But, what about wear and tear on your car??

4) Depending on the amount of errands you run, it looks to me that the company should have their own car/truck/minivan for you to be running errands in.

Good luck and I hope this helps!