Non-Owned Auto Coverage
Employees routinely use
their own vehicles in their jobs or just to run errands for their employer.
Does your company have protection in case of an accident and both your worker
and your company are sued? If your company has a business auto policy, it
should include coverage for ‘non-owned’ automobiles. These are vehicles owned
by others (such as an employee) that are used in the business of the company.
Generally a business auto policy only protects against losses involving
company-owned vehicles, so it is important to add "non-owned"
coverage.
Basic business auto
insurance only covers employees while they operate a company-owned vehicle to
perform company business. Usually, the employee’s personal automobile policy
will provide insurance to both the employee and the business when operating
their personal auto on behalf of the business. However, some personal auto
policies now exclude business use. So, a coverage gap may exist if the business
coverage is not extended to handle non-owned vehicles.
Another important
consideration is whether the amount of non-owned coverage is sufficient. Any non-owned
auto liability limits should be high enough to protect both the business and
the employee. A company has to evaluate its particular coverage need in order
to determine the proper level of coverage. Including ‘non-owned’ auto liability
coverage on the business policy will provide coverage for the business over any
deficiency in limit from the employee’s personal auto policy. This is coverage
for the BUSINESS, not the employee.
If the company does not own
any automobiles, it is possible to purchase business auto liability coverage
for only the danger of loss involving its use of ‘hired and non-owned’
vehicles. The ‘hired’ portion would cover business travel and vehicle rentals;
the ‘non-owned’ portion would cover employees using their own auto in the
business.
Even if a business rarely uses
non-owned autos, it only takes one serious accident to create a significant
loss for the business. You should find an opportunity to discuss this coverage
with an insurance professional.
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