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Everything you need to know about liability insurance and company cars

By April 30, 2022April 3rd, 2023Company Car Liability Insurance, L & I
inside of a car driving on highway in company car thinking about liability insurance

Driving a car owned by your company *cue the anxiety*

When we say “company car,” we are not referring to a vehicle your company purchased for your personal use. In this blog, we’ll be discussing company cars for in-company use. 

If you’re getting behind the wheel of a company car, you may be wondering what happens if you get into a fender bender? Don’t worry; we’re here to clear things up for you. Let’s start by defining liability insurance for company cars, a.k.a commercial auto insurance. 

What is commercial auto insurance? 

Commercial auto insurance is business insurance that covers automobiles owned by or used by a company and protects them from liability for damages caused by accidents involving your company’s vehicles. It also covers occupants of your company’s vehicles who are wounded in the event of an accident. 

If your company owns vehicles, commercial auto insurance coverage can protect you and your staff while driving said car(s) and performing business activities. It’s crucial to understand that a personal auto insurance policy typically does not cover automobiles used for business operations.

Washington State requirements for company liability car insurance

All business-owned cars in Washington State are required to have commercial auto insurance. The minimum requirements for Washington State auto liability insurance are: 

  • $10,000 per accident for property damage liability 
  • $25,000 per person for bodily injury liability 
  • $50,000 per accident for bodily injury liability

How expensive can company liability insurance be?

Because insurance premiums are highly personalized, each policy will have a distinct premium. On the other hand, commercial auto insurance is usually more costly than personal auto insurance. Commercial auto insurance also has substantially higher coverage limits than an individual policy. In fact, commercial auto insurance coverage limits tend to be at least $500,000 and can exceed $1 million. 

What to do if you get into an accident with a company car

Yikes, talk about a bad day at work! Much like a car accident with your personal vehicle, you will need to file a report with the police and determine the guilty party. 

However, if you were using a work vehicle as part of your job and were involved in a car accident, the respondeat superior laws apply. These laws say that in a working relationship between an employer and an employee, the employer is accountable for the accident if the employee acted within their expected work area.

The respondeat superior rule would not apply if the employee acted outside their scope of employment, such as running personal errands in the business vehicle. The individual would be accountable for the accident and any consequent compensation. (Sorry, no road trips in the company car.) This also means you’re covered under L&I and possibly a third-party liability claim – but again, only if you were doing company business in the company car.

Taking care of business with Carlisle + Byers

Dealing with the aftermath of a car accident can be stressful and complex, especially if a personal injury case is involved. At Carlisle + Byers, we want to eliminate all the paperwork headaches and claims drama to ensure you get back to normal without missing a beat. Ready to connect? Click to schedule a free consultation with us.


Photo by Markus Spiske on Pexels.