A situation: Let’s say that you have potential clients coming into your business to learn more about your company’s services. 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.
Even though your presentation impresses 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.
Most business owners don’t realize that their company is liable if an employee causes an accident during work, even if they drive their vehicle.
You must purchase non-owned automobile liability to protect your business if you require employees to drive during work. It is common for business owners’ policies and commercial auto policies to offer non-owned auto liability at a minimal cost.
In a nutshell, non-owned auto insurance protects your company if an employee causes damages or injuries while using their vehicle for company business. You should consider purchasing non-owned auto insurance if employees regularly use their cars 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
Going 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 a customer’s home, 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 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 car would not be covered by the employer’s policy.
Several personal auto insurance policies now exclude claims that arise when using a vehicle for business. Your employees must be aware of whether or not their 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 solid and comprehensive personal auto insurance that excludes accidents during business use.
To learn more about non-owned auto insurance, give us a call at (858) 384-1506 or visit www.foagency.com.