What protection do I have under my employer's business car insurance?

Although being given a company car to use is considered a great privilege, you must be aware of some pitfalls that you might not have been warned about by your employer. Knowing what your company's Business Auto policy (BAP) covers and what it doesn't will help you avoid unpleasant surprises in the future.

What Business Car Insurance Covers

A Business Auto policy (BAP) has two main coverages:

• Liability coverage - protects anybody driving the covered auto against liability for bodily injury and physical damage. In addition to this, your employer's business car insurance includes coverage for driving other company automobiles, since all vehicles owned or newly purchased by the insured are automatically covered by the Business Auto policy.
• Physical damage coverage - protects the driver of a vehicle against financial responsibility for causing physical damage to another vehicle. Two physical damage causes of loss are listed in the policy - collision and other-than-collision. The latter includes hazards other than collision, which can cause loss, such as theft, natural disasters, vandalism, fire, explosion, etc. Your employer can choose to get different physical damage coverage for the different autos owned.

Note that a Business Auto policy does not contain medical payments, uninsured and underinsured motorists coverages. These can be added in the form of endorsements.

Situations in Which You Are Not Covered By Business Car Insurance

Your employer's Business Auto policy does not provide liability protection in the following two scenarios:

• If a co-worker occupying the business vehicle is injured while you are behind the wheel;
• If you rent/borrow the vehicle for your personal use.

These potential predicaments, however, can be avoided if you have a Personal Auto policy.

You can add the extended non-owned auto endorsement to your policy for an extra $10 per year to cover you in the event that you cause an accident and injure co-workers. In addition, having a PAP means you are automatically protected against liability when driving a borrowed or a rented vehicle.

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