If Your Employee Is Hurt in Your Car, Does Your Auto Policy Pay?

A contractor drives a helper to a job. A home-care client drives a caregiver to the pharmacy. A shop owner sends an employee on an errand in the owner's car, with a co-worker riding along. Each time, a crash raises the same question: is this an auto insurance claim, or a work injury? California's Insurance Code leans firmly towards the second.

Three exclusions the statute permits

Insurance Code section 11580.1 lists exclusions a California auto liability policy may contain, including for the insurer's duty to defend. Three of them concern work:

• Your employee, on the job. Liability for bodily injury to an employee of the insured arising out of and in the course of their employment.
• Workers' compensation law. Liability imposed on or assumed by the insured under any workers' compensation law.
• Fellow employees. For people driving with permission, the coverage need not apply to an employee for bodily injury to a fellow employee injured in the course of employment.

Whether your policy uses each one is written in its exclusions section. The pattern is consistent, though: the auto policy steps back where workers' compensation is designed to step in.

What "in the course of employment" changes

The exclusions turn on whether the injured person was working for you at the time. A friend who happens to work for you, riding to dinner on a Saturday, is not on the job. The same person riding to a job site on Monday morning probably is. Where the line sits on particular facts is a question for your insurer and, if it matters, a lawyer.

Your own injuries on the job

The picture also changes when you are the one hurt while working and an uninsured driver caused it. California's uninsured motorist statute, section 11580.2, lets a policy reduce what it pays by workers' compensation benefits, and says the coverage does not apply where it would benefit a workers' compensation carrier, directly or indirectly. Arbitration of the UM claim may also wait until your condition is stationary if a comp claim is involved.

A worked example, limits only

You run a small landscaping business from your personal pickup, insured with liability of $100,000/$300,000. You drive an employee to a job and cause a collision that injures the employee and the other driver.

1. The other driver: not your employee, so your $100,000 per-person limit responds, subject to any business-use terms on your policy.
2. Your employee: injured in the course of employment, so a policy using the permitted exclusion would not pay; the claim belongs with workers' compensation.
3. Your pickup: collision, if you carry it, and if the policy accepts the business use.

The two questions to settle now

First, does your auto policy accept the way you actually use the vehicle for work? Business use is a rating and eligibility question in its own right, and a personal policy may not be the right fit. Second, is workers' compensation in place for the people who ride with you on the job? That second question belongs to the employer, and the Labor Code sets the rules, so confirm it with someone qualified to answer.

If your vehicle does double duty for work, ask us to quote it with the use described accurately; a policy priced for the way you really drive is the one that pays.