Excluding Employees on the Business Auto Policy

business_autos Question:

The insurance company covering our business vehicles wants to specifically exclude one of our valuable employees from coverage. He can use his personal vehicle to do his job, so we are thinking about signing the exclusion on the business auto insurance policy and letting him continue working for the company. Is this a workable solution?


Unfortunately, allowing an excluded employee to continue operating a vehicle on company business – even his own vehicle – is not a good idea for your company.

You are taking a big risk by letting him continue to drive on company business. The Named Driver Exclusion endorsement applies to all coverages on the policy, including the coverage that protects you in the event an employee has an accident while using the employee's own vehicle.

If the excluded driver is involved in a serious accident while performing his duties for you, the injured parties will almost certainly sue you as well as the employee. The insurance company will not defend the lawsuit on your behalf because of the driver exclusion endorsement, so your only hope for finding coverage is the personal auto policy carried by the employee. That policy may have been canceled or non-renewed for non-payment, and the limits may not be sufficient to cover the claim.

Excluding a valuable employee from your business auto policy may require distasteful decisions for you and the employee, but keep in mind that you didn't create the problem and the future of your company – and that of all other employees – could be in jeopardy if you allow the employee to continue driving on company business.

Swingle, Collins & Associates specializes in business auto insurance coverage. The descriptions of coverages listed on this website are brief and subject to the provisions, limitations, and exclusions that can only be expressed in your policy and related endorsements. For additional information of how Swingle, Collins & Associates can assist in meeting your coverage needs for business auto coverage, please contact your dedicated risk manager to discuss the benefits and services of commercial insurance coverage.

The information contained on this page is provided for informational and educational purposes only. It contains general information on insurance issues and may not reflect the most current developments in insurance coverage and is unlikely to apply in all factual scenarios. The information does not include all the terms, coverages, exclusions, limitations or conditions that may be contained in the actual insurance contract language. The policies themselves must be read for those details. Sample policy forms will be made available upon reasonable request.