Title mix up could leave you without liability coverage

If you own a business, make sure your vehicles are titled or leased under the business name and are covered appropriately. If your business is filed as a corporation, LLC, or partnership and you have a commercial auto policy, problems can occur when driving a personally titled vehicle on company time.

Why does it matter?
When you insure a personally titled vehicle as part of a commercial auto policy, you’re only providing coverage for the corporation, LLC, or partnership named on the policy. Liability coverage is not automatically extended to the individual vehicle owner.

Let’s say the roads are slippery and you hit a mailbox on your way to your local Chamber of Commerce meeting. Because the car is titled in your name, the mailbox’s owner could pursue both you and your business for the loss. And you could be on the hook for your own car repairs, too.

Bottom line
If an employee or business owner has a vehicle titled personally in his or her name, a commercial auto policy will not provide liability coverage for that employee because, by definition, the employee is not an “insured” — the business is. 

This employee, even if he or she owns the business, may be left without liability coverage for an accident involving a vehicle titled to them personally.

Now what?
Check with your insurance agent to be sure your commercial auto policy is set up correctly. Your agent should be able to add an endorsement that will extend coverage to the title holder. Alternately, you can set up a simple lease agreement, formally leasing your vehicle to the business.