How can we insure independent distributors on our company-owned vehicles?

UPDATED: Jun 1, 2012

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How can we insure independent distributors on our company-owned vehicles?

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?

Asked on June 1, 2012 under Insurance Law, Washington


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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