When you pay your employees the IRS-set mileage rate of 57.5 cents per mile, you are not only reimbursing them for the gas they use, as well as wear and tear on their car, but also for insurance.
If you have employees that drive as part of their job, or even those that run errands to the bank or the office supply store, you need to make sure they are insured. If you anticipate that any of your employees will be driving on the job, even if it’s infrequently, you should set insurance requirements for them so that your company is not held liable in case of an accident.
The state minimum insurance requirement is 15/30/5, which translates to:
- $15,000 for injury/death to one person,
- $30,000 for injury/death to more than one person (if more than one passenger is in the car), and
- $5,000 for damage to property (such as another vehicle).
Those are the maximums that the insurance will cover. But they are not enough to cover most accidents today – imagine if your employee rams into a late-model Mercedes.
Worse, if one of your employees is in an auto accident while on the job and hospital costs or damage costs to the other person’s vehicle exceed the maximums, your company will be responsible for covering the rest.
To best protect your business financially, if you have employees that you expect will be driving while on duty, you should require them to carry a higher maximum of 100/300/50. That is:
- $100,000 for injury/death to one person,
- $300,000 for injury/death to more than one person (if more than one passenger is in the car), and
- $50,000 for damage to property (such as another vehicle).
Workers’ Comp Applies
If your worker is hurt in a collision while carrying out duties for you, your workers’ comp policy will
cover their injury.
For more information contact Wright & Kimbrough to get details on the extent of your liability.