Is it legal to require employees to provide insurance for rental cars needed for business?

UPDATED: Sep 30, 2022

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Is it legal to require employees to provide insurance for rental cars needed for business?

My company requires me to rent cars on business trips to visit potential clients and sell them on our advertising opportunities. I am basically a traveling salesman or “road warrior”. I need to generate sales in different markets around the US and Canada. Until this week, my company would allow me to rent my vehicle with a company sponsored credit card, while declining insurance coverage because the company carried a policy for employees like myself.
Now, my company is telling me that I am required to provide the insurance on these car rentals. They expect our personal insurance policies will cover us, but many do not for business use.

Asked on January 18, 2016 under Employment Labor Law, New York


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Is this action against company policy? Does it violate the terms of an employment contract or union agreement? Doess your treatment constitute some form of actionable discrimination? If not, then your employer's requirement is legal. The fact is that in an "at will" employment relationship, a company can set the conditions of employment much as it sees fit. This includs having an employee provide insurance on rental cars used for business purposes (in fact, it would be legal to mandate that emloyee's pay for the rental cars out of their own pockets). That having been said, you can deduct the cost of the insurance on your personal income tax return.

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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