How can we insure independent distributors on our company-owned vehicles?
Question Details: My husband and I own a wholesale distribution company where we have a fleet of vehicles that we allow our independent distributors to drive on a daily basis. We most recently had business fleet insurance with liability coverage and found out that our insurance does not cover the drivers in the event of an accident because they are not technically employees. Can you let me know what the most cost-effective insurance options are? We thought about asking them to put the vehicles they drive on their own insurance, and then we will reimburse them for the cost of insurance - but will there be a problem with the insurance company paying a claim on a vehicle that isn't registered to them but the company?
The best way to resolve the issues that you have with insurance concerning your company's independent contractors is to "lease" them the vehicles that they drive where they are to insure them with an appropriate policy of insurance. The lease should be a written agreement signed by the independent contractor and yourself.
Under the lease, your company can elect to reimburse the independent contractors the costs of the insurance. Your company would also be an additionally named insured under the policy of insurance. I suggest that you consult with a business attorney further about your question and how to implement the suggestion.
