Business owners and employees are often in need of renting a vehicle while traveling for business purposes. Wise employers will always want to make sure their business and their employees are properly covered for any damage a rental vehicle may sustain and/or any unexpected events caused by the driver.
Rental car agencies offer coverage for “Liability” and for “Comprehensive and Collision.” Riviera Insurance Services recommends including rental car liability on your Business Auto Policy (BAP) and purchasing rental car comprehensive and collision from the rental agency.
I am aware of a tragic auto accident in which an intoxicated employee killed several people while operating a rented vehicle. Rental companies simply do not sell high enough limits to protect a business for such an extreme event, however a business with a properly endorsed BAP, plus an Excess/Umbrella policy, will be better prepared to meet the full liability of such a costly accident.
For several reasons, RIS recommends purchasing the rental agencies “Comp and Collision.” A BAP may not provide some coverage the rental agencies require, such as loss of use and replacement cost. Coverage purchased through the rental agency will match up with the requirements to protect the rented vehicle. In addition, a claim for even minor vehicle damages will appear on the business’ claims experience and loss report, thus negatively affecting their future BAP coverage and premium over the next five years. If the claim is covered through the rental agency insurance, it will not affect the BAP. Should damage occur to the vehicle, the “Comp and Collision” coverage purchased through the rental agency will allow the driver to ‘walk away’ from the time consuming hassle of the claim and paper work he/she may otherwise need to endure with the rental agency.
Many businesses that frequently use rental vehicles find it convenient and economical to prearrange rates and coverage with one or more favored rental agencies. The agencies may be willing to lower the rates when they are assured of repeat business. Maintaining a prearranged contract with a rental agency will eliminate the possibility of an employee making an incorrect choice when signing the rental agreement and will provided consistency in coverage.
The above advice applies to travel within the United States. For companies with travels outside of the US, we recommend purchasing all the insurance offered by the rental agency in addition to independently purchasing excess liability insurance to provide higher liability limits. As with other international business activities, there are often unique insurance features to consider when insuring your business and employees. Riviera Insurance Services is here to help you with all your insurance needs!