Are personal vehicles used for business covered?

Complete Guide to Business Use of Personal Vehicles

Why This Question Matters for Colorado and Utah Residents

If you or your employees use personal vehicles for work—whether it's running business errands in Fort Collins, making client visits in Denver, or delivering supplies in Salt Lake City—it’s crucial to understand how insurance responds. Gaps in coverage can lead to substantial financial risk, especially given Colorado’s high rates of hail, theft, and vehicle downtime costs.

• Common scenario in local business: Many small businesses in Colorado and Utah rely on employees’ cars for day-to-day operations, not realizing that standard personal policies often exclude business use.
• High-stakes regional risks: Hail accounts for 48% of fleet claims in Colorado. An uncovered incident—even during a routine delivery—can mean thousands in out-of-pocket losses and average downtime costs of $1,800/day.
• Regulatory complexity: CO and UT have strict commercial reporting rules. Using a personal vehicle for business without proper policy endorsements can trigger claim denials and fines.

What Most People Get Wrong

Many business owners and employees believe personal auto insurance automatically covers business activities, but most personal policies in both states specifically exclude business use unless an endorsement is added. Another common misconception is that “coverage follows the car,” but if your company isn't listed or endorsed, an incident on a business trip may not be covered by either policy.

Failing to address these gaps can result in denied claims, responsibility for property or liability damages, and regulatory penalties if the vehicle is involved in a workplace incident.

The Complete Picture

Non-owned auto coverage—added as an endorsement to a business or fleet policy—provides liability protection if employees use their own vehicles for work purposes. With the right endorsement, your business is protected when a personal vehicle is used for deliveries, sales visits, or other job-related travel. Some endorsements even allow for optional physical damage coverage, but this varies by carrier and region. In Colorado and Utah, this coverage is especially important due to elevated hail and theft risks, and higher-than-average business downtime costs when vehicles are out of service. Remember: you typically need to request this coverage specifically—don’t assume it’s included in your standard fleet or commercial auto policy.

To ensure everyone is on the same page and properly covered, review employee driving roles, discuss your operations with an agent familiar with CO/UT requirements, and update your policies whenever business vehicle use changes.

Making the Right Decision for Colorado and Utah Residents

Question 1: Does my policy expressly cover employees’ personal vehicle use for business?

Check your policy for a "non-owned auto" endorsement. If you’re unsure:

• Ask your agent to explain current coverage in plain language.
• Review whether employees frequently use personal cars for work in hail-prone or high-theft areas (e.g., I-25 corridor, downtown Salt Lake City).

Question 2: How much would an uncovered incident actually cost my business?

Don’t only consider repair costs. Factor in:

• Out-of-pocket repair averages in the region ($4,200 for collisions; $6,000 for hail; up to $1,800/day in business downtime).
• Possible legal costs if a lawsuit is involved.

Question 3: Am I regularly reviewing coverage as my business operations grow and regulations evolve?

Both Colorado and Utah have updated reporting and coverage mandates in recent years. Schedule annual policy reviews, especially if your workforce or routes change. Engage with a community-focused agency (like FoCoIns) that proactively tracks these local shifts to help prevent gaps before they create costly surprises.