The most significant risks are sometimes the ones we don’t foresee, and vehicles owned by employees can represent just that. Even though the business doesn’t own these vehicles, if they are ever driven in support of the business, the business can be held liable. Courts have imposed non-owned auto liability for injuries and damages caused by employee vehicles if the business received benefit from the trip, even if slight. Common examples are:
An employee running business errands to replenish supplies, pick up a business lunch order, or drop off mail.
Salespersons visiting clients and prospects.
Employees driving from one jobsite or location to another during the day. However, travel to work at the beginning of the day and home at the end is generally not considered a business liability.
Volunteers setting up, tearing down, and traveling to fundraising events.
Employees attending offsite training or company events.
Any employee travel for business purposes.
Non-owned auto liability is present no matter whether a company has a business auto policy or not. It exists whether the business owns no vehicles or maintains an entire fleet. Non-profits, social service, and faith-based organizations are particularly susceptible for such liability associated with volunteers since they perform many administrative, fund raising, and operational functions.
Check Your Blind Spot
Businesses routinely control risk for vehicles they own, but rarely consider how to do so for those they do not. For business vehicle drivers, they may review MVRs, require a driver training course, and provide regular safety briefings. Although these may not be practical for all employees, consider what may be appropriate to control employee auto liability. One solution is to purchase non-owned auto liability insurance, but several means which do not require insurance should be reviewed as well. For example, consider:
- Limiting business errands to specific employees.
- Require outside salespersons that drive their own vehicles to carry minimum levels of personal insurance, ensuring adequate first layer protection.
- Encourage a culture of safety within the organization and communicate safe driving habits.
Non-owned Auto Liability Insurance
Protection is available through non-owned auto liability insurance. This coverage is simple, affordable, and can often be endorsed onto existing policies or added separately. Non-owned auto liability insurance is commonly added to business auto policies but can be added to many business owner policies (BOPs) and even certain general liability policies. Non-owned auto liability is often bundled with hired auto liability which provides protection for temporarily rented vehicles and is shown on a policy as “hired and non-owned auto”.
The best means to protect your business depends upon your industry and operations. If you have need of non-owned auto liability insurance, review your policies to ensure it is present. If uncertain, contact your Bankers Insurance agent and we will be happy to review your policies and discuss your needs. Other auto-related liabilities to consider are:
- Hired auto liability
- Hired auto physical damage
- Driver other car
Questions regarding non-owned auto liability insurance? Contact your Bankers Insurance agent. Not a client of ours? Let us earn your business! Each client is assigned a personal agent in our office, given their email address, and provided a phone number that rings right on their desk.