Hired & Non-Owned Liability Coverage

As businesses of all sizes and industries are reevaluating how they plan on doing business moving forward, many small businesses have shifted from physical retail locations to online and home delivery services. This is to keep up with customer demand and social distancing guidelines. With this shift in the way businesses are run, they also face new risks. A smaller business may not be able to afford to hire a fleet of vehicles for their employees to drive and may rely on their employees to deliver goods using a vehicle not provided by the company. A hired and non-owned auto policy is one way these organizations can better protect themselves for the auto-exposure.

For example, hospitals and pharmacies may now rely on nurses to do more routine care through home care. This may be instead of outpatient treatment and offer home delivery of pharmacy items and prescriptions. To save money, these businesses may rely on their staff members to drive their own vehicles around the state. 

Restaurants & Insurance

The restaurant industry is another industry affected by these new lifestyle changes. Restaurants who were previously dine-in only are now offering the service of having orders available for take-out and may forgo using UberEats and Grubhub in favor of using their own staff as delivery drivers to keep more of their profits in house. 

If you have a sales team that is always on the road you have exposure. Do you have attorneys that go to court or accountants that go and see clients? How about estimators that go to look at new work, or safety personnel, inspectors that go from job to job? 

We encourage you to think about how you execute your day to day business to assess whether you have exposure. Of note, the commute to and from work is NOT an exposure. If they stop off to execute a task for the business, then go to work. This drive turns into an exposure because it’s no longer a commute. 

These are a few examples where Hired/Owned Auto Liability insurance might be of use to fund a potential liability exposure. 

 

Learn More: Auto Exposure in Home Healthcare Organizations

What is Hired & Non-Owned Automobile Liability?

If you do not own a car but frequently borrow other people’s cars, rent cars or use a car-sharing service, non-owner auto insurance offers you coverage if you cause an accident. Non-owned automobile liability can be extremely severe in many cases.

This type of insurance covers you for damage you cause to someone else’s car in an accident. It also covers liability for injuries to the occupants of the other car or to pedestrians.

You should also consider the coverage if you do not currently own a car but will in the future. Having continuous insurance coverage will help keep your premiums low when you purchase a policy for a new car.

 

Why does my business need this Liability Policy?

Many personal auto policies have exclusions on them regarding driving for businesses. This means the loss that occurs is the responsibility of the business and not the driver.  

If your business is putting drivers on the road during business hours, you are still responsible for their actions. This means that if your driver is in a car accident while driving from one client to another your business would fund the loss and pay the insurance claims before their personal auto coverage. 

Pairing your Hired & Non-Owned Auto Liability Policy with a strong safe driver’s agreement 

Insurance is important, but it is a trailer for all risk management processes. Having a safe driver policy that all of your employees must adhere to is one way to help manage the risks that come with employees driving their own vehicles for work. 

DOWNLOAD: A Sample of A Safe Driver’s Agreement

A safe driver’s agreement is an agreement all of your employees should sign stating that they will practice safe driving behavior while driving on company time. This agreement includes discipline for drivers who get tickets or have points on their licenses and can include safe driver incentives for their employees. Safe driver incentives can be a great way to help motivate your employees to be better drivers. 

 

If your organization lacks a hired and non-owned auto policy you are leaving yourself exposed to the risk of having to fund the entirety of a loss if a loss occurs. If your business is now looking to purchase a hired and non-owned insurance policy, contact a Risk Advisor at 914-357-8444 for more information on how.