What is Personal Injury Protection (PIP) Insurance and How Can it Help Protect My Business?

May 26, 2023 by Kemper

Photo shows an emergency vehicle parked on side of the road

There is a certain amount of risk that comes with running a business, especially if you or your employees are required to drive. To help reduce risk, owners may have the option to purchase personal injury protection (PIP) insurance coverage, which is required in some states. 

Read on to better understand how PIP coverage can help protect your business, and what it does and doesn’t cover. 

What is PIP Insurance?

PIP insurance can help cover medical expenses, lost wages, funeral costs, and other expenses if you or one of your drivers are injured in an accident. 

Known as no-fault insurance, PIP insurance coverage will apply no matter who is at fault. This means that even if you or your employees cause an accident, your PIP insurance coverage may still apply. Depending on where your business is located, you may be required or have the option to purchase PIP insurance. 

While PIP coverage is not available in every state, it’s worth considering purchasing for additional protection, if given the opportunity. Commercial PIP coverage typically only applies to those employees listed as drivers in your commercial vehicle policy. 

Do I Need to Buy PIP Insurance? 

States where you are required to purchase PIP insurance are called no-fault insurance states. If your business is in one of these states, you are required to purchase PIP insurance. 

Other states are called at-fault insurance states because the at-fault driver is usually responsible for damages. PIP insurance is not available in all at-fault states, however, if it is available, it may be optional or it may be required. 

If your business is in a state where PIP insurance is not offered, you may want to consider adding medical payments coverage, also called MedPay, to your commercial policy. It is important to know that while medical payments insurance may not cover everything that PIP typically does such as lost wages, it can help cover medical expenses and funeral costs for you and your employees regardless of who caused the accident. 

Keep in mind that medical payments coverage limits are typically lower than for PIP, so you should ensure that you also have enough health insurance coverage for yourself and your employees. 

It is best to check with your agent to better understand what your PIP insurance requirements and options are and determine what is best for your business. 

What Does PIP Insurance Cover?

PIP insurance can help cover medical and related expenses for you or your employees if they get into an accident while conducting company business whether at fault or not. 

PIP coverage may even apply when you or your employees are not driving. For example, if you or your employees are hit by a car while walking or biking on company time, PIP coverage may apply.   

PIP may cover a wide range of accident-related costs for yourself and your employees, such as:

  • Medical expenses 
  • Injury-related rehab
  • Disability-related costs
  • Wages lost during recovery
  • Substitute or household services 
  • Funeral expenses
  • Death benefits 

What Doesn’t PIP Insurance Cover?

PIP insurance only covers certain accident-related expenses for you or your employees. It does not cover expenses or damages sustained by other drivers or passengers.

PIP insurance does not cover damage to your vehicle or to another’s property resulting from an accident. PIP also does not cover property theft, like in the case of a vehicle being stolen. 

The details of what is covered and what isn’t vary greatly from policy to policy and state to state, so it is important to talk to your agent to understand your state’s requirements and the extent of your commercial PIP insurance coverage.

Talk with an Expert First

It’s worth talking to an insurance agent if you have questions about your PIP coverage, what is required in your state, and if it makes sense for your business.


Terms and Conditions

This material is for general informational purposes only. Products, services, and discounts referenced herein are not available in all states or in all underwriting companies. All statements are subject to the terms, exclusions and conditions of the applicable policy. In all instances, current policy contract language prevails. Coverage is subject to individual policyholders meeting our underwriting qualifications and state availability. Other terms, conditions, and exclusions may apply.