Many people may not think twice about lending their car to someone, especially if they’re a friend or colleague. Some might also use their personal vehicle for business purposes, assuming it’s not a big deal.
But in both of these instances, major problems could arise if something goes wrong. So it’s important to think twice before lending out a company vehicle, and know as much as you can about what risks you’re opening yourself up to.
Once you lend your car or truck out, you can’t control what happens to it, but you could be negatively impacted by someone else’s actions. For instance, if the person borrowing the vehicle is in an at-fault accident, your insurance premium may increase.
If someone borrows your car and is in an at-fault accident, your insurance premium may increase.
Another thing to keep in mind is that third-party coverage may also be affected if the driver does something that violates your insurance policy and gets involved in an accident. You could be implicated in the third-party insurer’s recovery attempt as they could sue both the driver and vehicle owner. Your insurance coverage may not respond to the loss as a result of the violation, so you and the driver would have to pay for your own legal counsel.
Because of the potential negative ramifications associated with lending out your company vehicle, it’s important to ask some questions before doing so. And yes, this applies even when lending a car to your own employees.
Some possible questions to ask include:
You can never be too careful in a situation like this. There are a number of best practices that you should perform, just to make sure you’re doing everything you can to avoid an unwanted situation.
Some important things to know are listed below:
You can’t control what someone does when they’re using your company vehicle, but you can be careful about who you lend it to, and determine the measures you have in place in case of an accident. To learn more, visit Federated’s commercial auto insurance page and find out how we can help you today!
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.