Company Car Insurance
Seems like a lot of businesses are trying to save money these days. One option employers are adopting is to use the employees’ insurance as a stop-gap measure on their own liability. 
For example, an employer might carry liability insurance but make employees use their own cars – and their own car insurance. That way, if employees get into an auto accident, the employee’s insurance cover kicks in, instead of the employer’s. But this is generally a bad idea.
Employers Risk Increased Liability
If your employee is using his own vehicle, instead of the company one, then you may find yourself on the nasty end of a lawsuit – or possibly fines.
The Management of Health and Safety at Work Regulations of 1992 requires you to carry out regular assessments regarding the safety of your employees while at work.
Since your employees are using their own vehicle for work purposes, this may fall under your responsibility according to the government. Driving any vehicle on company business – regardless of who owns the car – falls under this legislation.
Employees Risk Losing Insurance Coverage
From the employer perspective, you might not care about this much, but that’s generally not a good way to treat employees – especially if they’re loyal. From an employee perspective, the loss of coverage may mean the loss of driving privileges.
For any miles you travel on the road, in connection with a business journey, you are considered to be driving uninsured if you do not have business auto insurance. Obviously, uninsured driving is illegal.
Even if you have personal insurance, the insurance carrier considers business use to be a different kind of coverage for which you are not insured, so your personal insurance won’t apply.
Driving uninsured in this manner will result in a fixed penalty of $200 and 6 penalty points if a police report is filed (as a result of an accident). If you go to court, the maximum fine is a maximum fine of $5,000 on top of being disqualified from driving.
Employees Risk Getting Into an Accident without Proper Coverage
If your employees do get into an accident, not only could they lose their insurance coverage, they could end up with a big repair bill. One of the great things about insurance is that it pays for damage to your vehicle when you get into an accident.
However, without business coverage, these costs are pushed back onto the employee. Worst case scenario: your employee looks to you to pay for all of the damages related to repair, loss of cover, and suspended driving privileges.
Also, if your employee is in an accident, has to go to court, and is disqualified from driving, you just lost a valuable asset to your company.
According to Centor Insurance and Risk Management, simple things like being sleepy, speeding, being distracted by your mobile, or even aggression on the roads dramatically increases your risk for being involved in an accident. Since these activities are common during business journeys, it pays to get the proper insurance coverage right from the very beginning.
Guest Post Submitted by Monkey.co.uk
About guest post author
Gillian Kearney has been sharing her extensive experience as a personal finance consultant through blogging for over 3 years now. Her articles mainly appear on money saving blogs. Visit the Monkey website for more ideas.