It seems innocent enough: you’re busy at work so you ask one of your employees to run a quick errand. A trip to the bank, the post office, the airport to pick up a client. It happens every day at businesses everywhere.
On the way, however, your employee gets into an accident, hurting themselves, the other driver and damaging both cars. Making matters worse, the other driver has no insurance whatsoever.
A few months later, you find yourself in court, defending yourself against what the lawyers call “vicarious liability,” a common-law doctrine that leaves the employer liable for the acts of their employees. Needless to say, while most motor vehicle accidents are not fatal, many can be really expensive.
This is where a Hired and Non-Owned Auto Insurance policy would have helped.
Hired and non-owned auto coverage provides coverage for bodily injury and property damage losses caused by vehicles you don’t own – including your employees’ cars – and vehicles you lease, hire, rent or borrow.
But wait, you say, you already have a commercial auto insurance policy, so why would you need another auto policy?
Because commercial auto policies are vehicle-specific — they do not travel with the driver. In other words, you’re not covered if an employee hops into anything but the company car for a work-related errand.
With hired and non-owned auto coverage in place, you won’t have to worry about paying anything out of pocket.
Your employee’s personal auto policy, for the record, is unlikely to protect your business. A standard personal auto policy typically excludes “livery” – carrying goods (or people) for a fee.
Hired and non-owned insurance, meanwhile, not only covers medical and car-repair bills, it also can cover your business’s legal fees.
Finally, one last important point: Non-owned insurance only covers business-related travel. It won’t cover accidents that happen during commutes or personal errands.
Not sure whether your business needs hired and non-owned auto coverage? Reach out to us; we can help walk you through a few scenarios.
Spencer Mahoney is a CCIG insurance advisor. Reach him at 720-212-2051 or SpencerM@thinkccig.com
CCIG is a Denver-area insurance brokerage with the full-service capabilities of a national brokerage. We do more than make sure you have the right policy. We help you manage your long-term cost of risk with our risk and claims management expertise and a commitment to service excellence.
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