Q: If an employee drives a regularly furnished company car and the employee and family members are injured in an accident while using that car, how is that claim covered? How would personal injury protection insurance interact with a personal auto policy, the employer's business auto policy and workers compensation? 

Response 1: You have asked an extremely complicated question. Not only do the specifics of the policies matter, but also which party is at fault plays into subrogation and liability.

First, looking at the BAP, you'd need to make sure the vehicle is covered as an owned auto. Why would the PAP be involved? If it's a personal auto of the employee that they were using for work, then it wouldn't be covered under the BAP.

Regarding the interplay of policies when it comes to claims, if the employee was on a work errand, they would likely have workers comp. But workers comp is one of the three exclusions related to employee injuries in the BAP. There may be PIP for the employee. Insurance follows the car, so PIP may be available for the vehicle passengers.

The employer's BAP physical damage coverage should take care of the physical damage, less the deductible. Who is at fault creates another wrinkle into the story, since it brings more insurance policies into the picture. 

Response 2: The PAP excludes liability, medical payments coverage and collision when any family member is using the company car. Be sure to check your area's statutes for PIP and uninsured/underinsured motorist coverage.

The employee should add the Extended Nonowned Coverage Endorsement (PP 03 06) to their PAP. That would address liability and medical payments coverage.

The BAP is on the hook for any and all damage or injury caused by that auto, regardless of who is driving. All operators should be disclosed to the BAP insurer.

Response 3: It depends on the state and the policy wording, but generally there is no coverage for use of a non-owned vehicle furnished for regular use. Employees using company cars need to have either a personal policy on an owned vehicle or be named on a broad form drive other car endorsement on the BAP, like Drive Other Car Coverage—Broadened Coverage for Named Individuals Endorsement (CC 99 10).

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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