If you provide company vehicles to your employees and these employees don’t have their own personal automobile policy, a potential gap in coverage may exist. To adequately cover your risk, a drive-other-car endorsement is specifically intended to bridge this gap.
If you have employees that are provided with company-owned vehicles, they often do not have an additional automobile and therefore do not carry a personal automobile policy.
If the employee doesn’t carry a personal policy and drives a vehicle borrowed from another party, other than the company-issued vehicle, drive-other-car coverage affords them protection should an accident occur.
Drive-other-car coverage is endorsed onto your business automobile policy and provides coverage only for scheduled individuals.
To show how drive-other-car coverage applies, consider the following situations:
- A salesperson rents a car for personal use on vacation and damages another vehicle. Is he or she covered?
- A business owner has all the vehicles titled in the company’s name. The owner’s family travels out of town on vacation and rents a car, opts not to purchase coverage and is involved in an accident. Is he or she covered?
- An executive borrows a friend's minivan to move and is involved in an accident. Is he or she covered?
In all of these circumstances, the business automobile policy provides no coverage since the "covered auto," or company-owned vehicle, was not involved in the accident. A drive-other-car endorsement closes the exposure loop in these instances.