What Is Non-Owned Auto Liability Insurance?

A situation: Let’s say that you have some big potential clients coming into your business to learn more about the services that your company offers. You and your team have spent weeks putting the finishing touches on a presentation, and you’re sure that you’ll blow the potential clients away. As an after-thought, you send an intern out to bring back sandwiches for everyone.


Well, even though your presentation does impress your visitors and they sign on right away, not everything goes according to plan. The intern gets into an accident on his way back with the food, and the other driver sues your company for damages.


Many business owners don’t realize that any time they send an employee out for an errand or any other purpose related to the business, their company can be held liable if that employee causes an accident, injuries or damages, even if they’re driving their own car.


That’s why if your employees make trips for business purposes in their personal vehicles, you need to make sure that your company is covered by a non-owned auto liability insurance policy (it can be added to a business auto policy or business owners  policy(BOP) for a very small cost).


In a nutshell, non-owned auto insurance covers your company in the event that an employee causes damages or injuries while using their personal vehicle for company business.  You should definitely consider purchasing non-owned auto insurance if employees regularly use their own vehicles for business purposes such as:

  • Picking up supplies for the business
  • Picking up lunch or other meals for the business
  • Delivering supplies to customers or clients
  • Driving to meetings with vendors
  • Making house calls to customers
  • Driving to events on behalf of the business


It’s important to note that non-owned auto liability insurance only covers liabilities related to the business, not the employee. That means that if an employee has an accident while driving to the home of a customer, the non-owned auto insurance coverage will cover the business if it gets sued but will not cover any of the employee’s liabilities. In most cases, the employee’s own auto insurance should cover their own liabilities.  Furthermore, non-owned auto liability does not cover physical damage to non-owned vehicles.  Thus, in the example used above, the damage caused to the employee’s vehicle would not be covered by the employer’s policy.


Certain personal auto insurance policies now exclude claims that arise when the car was being used for business. It’s important for your employees to be aware of whether or not their personal auto policy has this exclusion, as it could put them at significant risk if they get in an accident when driving for the company.


Overall, it’s best to sit down with a knowledgeable insurance broker to determine if your company could benefit from non-owned auto insurance. At Fusco & Orsini Insurance Services, we’ll discuss how your employees use their vehicles to see if non-owned auto insurance is right for you. We can also help your employees find a strong and comprehensive personal auto insurance that won’t exclude coverage for accidents that occur during business use.


To learn more about non-owned auto insurance, give us a call at (858) 384-1506 or visit www.foagency.com.

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