Have you ever purchased a new toy for your kids, an expensive camera for a spouse, or even a new power tool for yourself, only to realize upon opening that you overlooked the “batteries not included” note on the box? Similar oversights with your business insurance can lead to major setbacks, and the fix isn’t always as simple as a $5 pack of batteries.
For example: What if one of your employees has an accident on the way to the bank, or in a rental car on a business trip?
Many companies with office-based operations (like a collection agency) might not carry a business auto policy if they do not own company vehicles. However, it is still important to account for the company’s exposure from borrowing or renting a vehicle for business use, or asking an employee to drive their personal vehicle for company business.
This is a gap that may be filled by adding hired/non-owned auto insurance onto your general liability/business owner package policy. This coverage is not intended to replace the employee’s primary personal car insurance, but is designed to protect your company from the secondary legal liability that could stem from an accident.
Hired/Non-Owned Auto coverage was designed to address the needs of companies with primarily incidental, lower-hazard auto exposures. This would typically apply to a company that does not own any business vehicles but might occasionally have to hire, rent or borrow a vehicle for business purposes. It can also involve the insured company requiring an employee to use his or her personal auto for business purposes. The coverage may extend to include bodily injury or property damage arising out of the loading or unloading of the vehicle in connection with the insured’s business.
Underwriters will evaluate the company’s frequency of use for personal vehicles, as well as the radius of travel, when determining eligibility and pricing. It is advisable to check the personal auto insurance of your employees before letting them drive for business purposes, and also to verify that their policy form does not exclude business use of their vehicle.
Cornerstone Support and its in-house insurance agency Integrity First Insurance strive to provide practical guidance by helping identify gaps and providing the best values to address them. If you have questions about hired/non-owned auto or have concerns about any other potential gaps in coverage, contact us at (770) 587-4595.
Contribution by Barbara Casserly, The Hartford, New Business Underwriter