Many Human Services and Healthcare organizations rely on their staff to visit client homes, facilities, and provide transportation for clients. A strong set of controls paired with the appropriate insurance coverage can significantly lower an organization’s cost of risk as it relates to auto exposure. Setting up the right controls is largely what will determine an organization’s cost of risk. Insurance coverage is the simplest part.
Prevention of scenarios with the right systems in place:
Scenario 1: A Non Profit checks Motor Vehicle Reports (MVRs) upon hire and even annually. An employee transporting clients causes a severe accident with another vehicle. Since the last MVR run was clean, they are found to have a suspended license. This is due to repeated reckless driving and speeding violations.
Coverage Response: The carrier pushes back citing it is the employer’s responsibility to know the status of the driver’s record and take preventative action. The claim is denied by the carrier. Then, the Non Profit assumes full responsibility for the cost of the injured claimant in the other vehicle, the injured clients, and the physical damage to the vehicles. The damages
Preventative Solution: There are vendors who can provide Automated MVR updates any time there is an event on a driver record, allowing the employer to take immediate action. Tie the Automated MVR update system to MVR grading criteria and a Progressive Discipline Policy within a well-defined Drivers Agreement. This is to hold drivers accountable and encourage safe driving.
Scenario 2: A Home Health Care Agency declines Hired and Non Owned Auto Coverage and does not require employees to maintain a minimum personal auto limit. The Agency’s driving exposure includes personal vehicle use:
- Nurse Supervisors driving to client homes & facilities
- Aides running errands and providing transportation for clients to Dr.’s appointments
An Aide maintains the statutory minimum insurance requirement, transports a client and causes an accident with another vehicle. The aide totals the other vehicle. The other driver and the client sustain injuries and sue the aide for $100,000 each.
Coverage Response: The statutory limit provides a maximum of $50,000 bodily injury liability to all persons and $10,000 to property, meaning the Agency is responsible for $75,000 to both the other driver and the client as well as value of the vehicle less the $10,000 from the aide’s policy. As Hired and Non Owned Auto isn’t in place, this is uninsured loss the Agency would pay out of pocket.
Preventative Solution: The Agency should require a minimum limit for personal auto coverage to form a Primary Layer before the business insurance needs to respond. We recommend a $300,000 limit. Further, proof of coverage and payment should be collected annually. Purchase Hired and non owned auto with a $1,000,000 CSL AND included in an Umbrella.
