Yes, he can! In this instance, you are basically acting as the bank. We recommend for him to get a full coverage plan and list you as an additional interest on the vehicle. This way, if the employee gets in an accident, the funding can go to you to pay off what he owes you. This is exactly what banks do to protect their investment. If you are okay with him not having full coverage, he can still get insurance but the company will likely just require you to be an added or excluded driver on it. You can find quotes for both right here with The Zebra.
For more information, see our additional articles here: Car insurance for a financed vehicle Best full coverage car insurance