An employee is driving a company vehicle when another motorist causes a serious crash.
The employer’s commercial auto policy shows $2 million in bodily injury liability coverage. The at-fault driver carries only a fraction of that amount.
It’s easy to assume the injured employee has up to $2 million in underinsured motorist coverage through the company policy.
New Jersey’s Supreme Court made clear in August 2026 that this assumption can be wrong.
In Chiaccheri v. Zurich American Insurance Company, the Court held that a commercial policy’s underinsured motorist limit does not automatically rise to match its much larger third-party liability limit.
The two numbers insure different risks.
Liability Coverage and UIM Coverage Do Different Jobs
Liability insurance protects the insured when the insured is legally responsible for injuring someone else.
Underinsured motorist coverage, commonly called UIM, works from the opposite direction. It can protect an insured person who is injured by someone whose liability insurance is insufficient.
Suppose a company vehicle carries $2 million of liability coverage.
That $2 million may protect the company and qualifying insureds against claims made against them after they cause an accident.
It does not necessarily mean an employee injured by someone else has $2 million available under the policy’s UIM provision.
The UIM limit has to be identified separately.
That distinction is particularly important in New Jersey because employers and other businesses frequently purchase commercial policies with liability limits far above the statutory minimums.
The 2026 Chiaccheri Case Put the Difference in Sharp Focus
In Chiaccheri, an employee was injured while driving a vehicle owned by his employer.
The employer’s Zurich policy provided $2 million in bodily injury liability coverage but only $15,000 in UIM coverage under the policy applicable at the time.
The driver who caused the collision carried $100,000 in liability insurance.
Because the at-fault driver’s $100,000 limit was greater than the $15,000 UIM limit, Zurich denied the employee’s UIM claim.
The employee argued that New Jersey law should reform the policy so that his UIM protection matched the $2 million liability limit.
The New Jersey Supreme Court unanimously rejected that argument.
Employees Must Receive the Same UIM Limit as the Business, Not the Liability Limit
The dispute centered on N.J.S.A. 17:28-1.1.
New Jersey law prohibits a commercial auto policy from giving an employee less UM/UIM protection than the policy provides to the corporate or business entity named as the insured.
But the Supreme Court held that this requirement establishes parity between the employee and employer under the UIM portion of the policy.
It does not establish parity between UIM coverage and the policy’s liability limit.
For someone reviewing coverage with New Jersey accident attorneys, that means the large number on the declarations page should not end the inquiry. Liability, uninsured motorist, and underinsured motorist limits need to be identified separately.
New Jersey Prohibits One Kind of “Step Down”
The statute at issue has an important history.
New Jersey amended the law after an earlier case allowed a commercial policy to reduce an employee’s UIM protection based on the limits of the employee’s own personal auto policy.
The Legislature responded by prohibiting that type of employee “step-down.”
When a corporate or business entity is the named insured, employees must receive the maximum UM/UIM coverage actually available to the named business under that commercial policy.
Chiaccheri explains the boundary of that protection.
An insurer cannot give the company one UIM limit and quietly reduce the employee to something lower merely because the employee has separate personal coverage.
But the statute does not require the business itself to purchase UIM limits equal to its third-party liability limits.
Today’s Minimum Limits Are Higher Than the Ones in Chiaccheri
The $15,000 figure in Chiaccheri should not be mistaken for New Jersey’s current minimum.
New Jersey has phased in higher automobile insurance requirements.
For qualifying policies issued or renewed on or after January 1, 2026, current law generally uses minimum bodily injury limits of $35,000 per person and $70,000 per accident, and the state’s UM/UIM requirements likewise reflect those increased statutory amounts where applicable.
A useful overview of the newer insurance limits shows how substantially New Jersey’s minimum coverage framework has changed in recent years.
The principle from Chiaccheri, however, remains important even as the minimum numbers rise.
A commercial policy can carry very high liability coverage while selecting a substantially lower amount of UIM protection, provided the coverage complies with applicable statutory requirements.
An Employer Can Be Well Insured Against One Risk and Poorly Insured Against Another
Consider a delivery company with a $1.5 million or $2 million liability limit.
Management may select that amount because one serious crash involving a company driver could expose the business to a substantial lawsuit.
But that same company may select a much lower UIM limit.
The result can seem counterintuitive.
If the employee causes a crash, substantial insurance may be available to people injured by the employee.
If the employee is badly injured by an underinsured driver, the protection available to that same employee under the company’s UIM coverage may be dramatically smaller.
Those are different insurance purchases addressing different directions of risk.
The At-Fault Driver’s Policy Still Comes First
UIM coverage is designed to address insufficient liability insurance carried by the person responsible for the crash.
The other driver’s policy therefore remains central.
If an at-fault motorist carries enough liability coverage to exceed the applicable UIM limit, there may be no UIM recovery under that particular policy at all, as occurred in Chiaccheri.
When injuries are substantial, analyzing the accident process should therefore include identifying every potentially applicable layer of insurance rather than concentrating on a single policy.
Depending on the facts, those layers could include the at-fault driver’s coverage, the employer’s commercial policy, personal household coverage, umbrella or excess policies, and other coverage connected to a responsible party.
A Company Vehicle Does Not Automatically Mean Unlimited Commercial Coverage
Another common mistake is treating the phrase “commercial policy” as shorthand for abundant coverage of every kind.
Commercial policies can be highly customized.
The business may select different limits for liability, physical damage, medical benefits, UM/UIM coverage, and excess insurance.
Policy endorsements can also alter which vehicles and insureds receive particular protection.
That makes the declarations and endorsements more important than assumptions based solely on who owned the vehicle.
Even when the employer has complied fully with New Jersey law, the amount available for an employee’s first-party UIM claim may differ substantially from the amount shown as the liability limit.
The 2026 Decision Makes Policy Review More Important
The New Jersey Supreme Court did not hold that employees can receive less UIM coverage than their employers receive under the same qualifying commercial policy.
It held the opposite: the statutory parity requirement remains.
What the Court rejected was the argument that the employer’s much larger liability limit should be treated as the amount of UIM coverage “available under the policy.”
That distinction matters after serious workplace-driving accidents.
A $2 million figure on a commercial auto policy can be highly significant without answering the question an injured employee actually needs answered.
The correct question is not simply:
“What is the policy limit?”
It is:
“Which coverage limit applies to this particular claim?”
In New Jersey, Chiaccheri now provides a clear answer that liability and UIM limits cannot be treated as interchangeable numbers.
