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If an employee causes an accident while driving your company vehicle, you can be held legally responsible for it, even if you weren't anywhere near the wheel. New York law makes vehicle owners liable for the negligence of anyone driving with their permission, which means the decision to hand an employee the keys carries real financial exposure. Before your Southold business puts anyone behind the wheel of a company car, van, or truck, it helps to understand exactly what that exposure looks like and how to cover it.
Under New York Vehicle and Traffic Law Section 388, every vehicle owner "shall be liable and responsible for death or injuries to person or property resulting from negligence in the use or operation of such vehicle" by anyone driving it with the owner's permission, express or implied. In practice, that means an injured party in an accident can pursue a claim directly against your business, not just against the employee who was driving. It doesn't matter whether the employee was technically off the clock when the crash happened. If they had permission to use the vehicle, the liability can trace back to you as the owner.
That single fact should shape how a business decides who drives, what they drive, and how much insurance stands behind that decision.
New York requires vehicle owners, including businesses, to carry at least $25,000 in bodily injury liability coverage per person, $50,000 per accident, and $10,000 in property damage coverage, often written as "25/50/10." A commercial auto policy is what actually extends that liability protection to the business entity itself, not just the person behind the wheel, and it can be structured to cover every vehicle your business owns.
Those state minimums are a legal floor, not a safety net. A single serious accident, especially one involving an injury, can produce a claim well beyond $60,000 in medical costs and damages. Most businesses that put employees on the road, particularly ones making deliveries, running job sites, or transporting clients or materials around the East End, carry considerably higher limits than the state requires.
Plenty of Southold businesses don't own a fleet at all. An employee running to the post office, delivering a proposal, or picking up supplies in their own car is still creating liability exposure for the business, even though the vehicle isn't yours.
This is where hired and non-owned auto (HNOA) coverage comes in. It protects the business when an employee drives their personal vehicle for work purposes, and separately when the business rents, leases, or borrows a vehicle. HNOA coverage typically applies on top of the employee's own personal auto policy, stepping in once those limits are used up, and it covers bodily injury and property damage claims against the business. It does not cover damage to the employee's own car, injuries to your own staff, or driving that has nothing to do with work. If your team ever drives their own vehicles on business errands, this coverage closes a gap that a standard commercial auto policy alone won't.
Insurance is only part of managing this risk. Allowing someone with a poor driving history to operate a company vehicle can expose a business to a separate claim known as negligent entrustment, where the business itself is accused of acting carelessly by putting an unqualified or unsafe driver on the road in the first place.
A few habits go a long way toward reducing that exposure:
None of these steps require sophisticated systems for a small or midsize business. They just require doing them before an incident, not after one.
A short written policy protects both the business and the employee by setting expectations up front: who's authorized to drive, what vehicles or trips are covered, whether personal use is allowed, and what happens if someone is involved in an accident or receives a moving violation. Having this in writing also gives your insurance agent something concrete to work from when structuring coverage that actually matches how your business uses vehicles day to day.
East End Insurance has worked with businesses across Southold and the rest of Long Island's East End since 1885, and commercial auto is one of the coverages we place regularly for local business owners. If your team drives company vehicles, personal vehicles for work, or a mix of both, we can walk through where your current coverage may fall short and what limits actually make sense for your operation. Contact us today at 631-765-3811 to get a quote.
In New York, yes. Vehicle and Traffic Law Section 388 makes the vehicle's owner liable for injuries or property damage caused by anyone driving it with the owner's permission, which typically includes an employee authorized to use a company vehicle.
You likely still need coverage, just a different kind. Hired and non-owned auto (HNOA) coverage protects a business against liability claims when employees drive personal vehicles on company business, even though the business doesn't own the car.
It's a legal claim that holds a business responsible for allowing an unqualified or unsafe driver, someone with a poor driving record, a suspended license, or no valid license, to operate a vehicle on the company's behalf.
New York's legal minimum is $25,000 per person and $50,000 per accident for bodily injury, plus $10,000 for property damage, but many businesses carry higher limits given how quickly a serious accident can exceed those amounts. An agent can help match your limits to your actual operation.
