Non-owned automobile liability
We all know that obtaining automobile insurance for the vehicles that you own is important. However, as a business owner, it isn’t just your vehicles that you have to worry about.
There are often occasions where your employees may use their own personal vehicle for business-related tasks. If an accident occurs while this is happening, you could be hit with a costly lawsuit. That’s where non-owned automobile insurance comes in.
What is non-owned automobile insurance
When an employee uses their own personal vehicle on your company’s behalf, there’s always the risk of an accident occurring that causes property damage or bodily injury to a third party. Non-owned automobile insurance provides peace of mind in the form of liability coverage to protect against costly lawsuits that your business may face as a result of this.
Who needs non-owned auto liability insurance?
It doesn’t matter what industry you’re in, or if your organization is big or small – if there’s a chance that your employees may use their own vehicle for business related activities, then non-owned automobile insurance is a must!
Below are a few examples of situations that may give rise to a non-owned automobile claim:
- A salesperson drives their vehicle to a client’s location
- Service employees shuttle between job sites in their own vehicle
- A warehouse employee drops off a package on their way home
- An employee uses their own vehicle to run to the bank for the business
- An employee uses their personal vehicle to pick up lunch for senior management
- An employee uses their vehicle to pick up a client from the airport
Does my company have a non-owned automobile liability exposure?
When looking at their insurance needs many business owners only think of the liability risk associated with their own vehicles. The problem with this way of thinking is that they can be on the hook for costly lawsuits if damages occur as a result of their employees using their personal vehicles for the business as well.
Frequently asked questions
Do I need non-owned automobile insurance if my employees already have insurance for their vehicles?
Yes! It’s important that you have non-owned automobile insurance even if you’re sure that your employees have vehicle liability insurance of their own. The world is becoming increasingly litigious and liability claims as a result of automobile accidents are getting more and more expensive. These increasing claim costs may result in your employees being underinsured. If an accident occurs while the employee is using their own vehicle to perform business related activities, and the liability limit that they have chosen is less than what is needed to cover the costs of the claim associated with said accident, then you could be on the hook for the remaining amount of these potentially very expensive claims. It’s important to obtain non-owned automobile insurance to protect against this.
How much does non-owned automobile insurance cost?
Like most insurance policies, there’s no set answer to this question. Insurance premiums depend upon liability factors such as claim history, revenues, exposure to risk, and much
more—non-owned automobile insurance is no exception. In some cases insurance companies will include non-owned automobile insurance
coverage as a part of their commercial general liability package without additional charges. However there are insurance companies that will either charge increased premiums to add this coverage or exclude it completely if the company has an increased non-owned automobile liability exposure (eg. A restaurant where the employees deliver food using their own vehicles).
What are some examples of circumstances that could lead to a non-owned automobile liability claim?
Here are some real world examples of situations that may cause a non-owned automobile liability claim to arise:
- A senior partner’s meeting is being held at a law firm. One of the executive assistants, Krista, is given the company card and asked to go pick up coffees and baked goods for the meeting. On her way to the coffee shop she rear ends a vehicle that stopped suddenly in front of her.
- A pizza shop has a delivery vehicle in the company’s name, but it won’t start. The manager asks if one of the employees can make the deliveries with their own vehicle until they can get it fixed. The employee agrees, and on the last delivery they hit a car while backing out of the driveway.
- After working at one location all morning, a residential construction company asks one of its plumbers to go to another job site to help get the construction back on schedule. On his way there, he sideswipes a vehicle in his blind spot.