Driver-owned or leased vehicles used for business

Employers often rely on employees using their personal vehicles for work-related activities, such as running errands or traveling to events and meetings. While an employee's personal insurance should provide coverage in the event of a crash during such trips, the business owner may also be liable because the business was deriving a benefit from the travel. In some jurisdictions, an employee's regular use of their own vehicle for business purposes may also expose the business to liability for a crash that occurs while the employee is commuting to and from work.

Businesses that expect or require employees to use their personal vehicles for business purposes should take steps to manage this liability exposure. These steps include maintaining adequate insurance and ensuring that drivers are qualified and supervised.


Businesses should decide what minimum levels of automobile liability and property damage insurance should be required for employee owned or leased vehicles that are operated for the business. Drivers should be required to provide evidence that they maintain this coverage, and the business should keep this information on file. In addition, businesses should consider adding "non-owned auto liability" coverage to their own insurance.

Driver qualification

Drivers of personally-owned or leased vehicles should meet the same qualification requirements as drivers operating business-owned vehicles. The driver should have a valid driver's license from his/her state of residence. A state Motor Vehicle Record (MVR) should be obtained initially and annually thereafter for each to assure the driver's license is still valid and to evaluate the risk presented by using the driver in the business. Employee-drivers should be required to report any traffic conviction before operating a vehicle for the business (e.g., moving violations, DUI). Employees who do not meet minimum established company criteria should not be allowed to operate vehicles for the business.

Driving policies

Employees operating vehicles on company business should be required to comply with all driving-related laws and regulations and any business-specified policies, such as company distracted driving or drug and alcohol policies. All occupants of vehicles operated for business purposes should be required to be secured in a safety belt. Employees should be required to sign acknowledgements that they will abide by company driving policies.


The business needs to assure that it has reasonable expectations for their driver employees to not compromise safety (e.g., scheduling appointments too closely can encourage speeding and reckless driving).


Where driver safety training is available to operators of company-owned/leased vehicles, training also should be made available to employees operating their own vehicles.

Vehicle maintenance

A policy should be in place requiring the employees to maintain their vehicle in accordance with the manufacturer's recommended service guidelines.


Employees operating their owned/leased vehicles on company business who are involved in a crash should be required to immediately report the incident to management. Details of the crash should be recorded by the company in the event the company is involved in future litigation.

Copyright ©2020, ISO Services Properties, Inc.

This material is provided for informational purposes only and does not provide any coverage or guarantee loss prevention. The examples in this material are provided as hypothetical and for illustration purposes only. The Hanover Insurance Company and its affiliates and subsidiaries (“The Hanover”) specifically disclaim any warranty or representation that acceptance of any recommendations contained herein will make any premises, or operation safe or in compliance with any law or regulation. By providing this information to you. The Hanover does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.

LC FEB 2019 08-293
171-0845 (06/19)