Even if an employee is using a personal vehicle for a company-related trip to pick up produce, for example, or to drop off a cake, and gets into an accident while 'on the job', the business could be liable for the costs associated with any claims. These vicarious liability claims could amount to tens of thousands of dollars - which could result in the company's downfall if it is not adequately protected.
Clearly outlining each staff member's job description may determine if the claim is a result of the employee's own error, or if it is to be attributed to the business.
A commercial general liability insurance policy can protect businesses against this and a wide variety of other claims. Not having it is a false saving - sure you may save a few dollars in the short term, but could lose tens of thousands in the long run.
"Vicarious liability involves placing the liability for one’s actions upon another person. Where an employment relationship exists, employers can be held vicariously liable for the actions of their employees. This is an implied term in employment contracts."
Business owners are responsible for the actions of their employees, should the employees cause bodily harm while on company time, on the company's property or using the company's tools and equipment.