Business owners are well aware of the importance of insurance protection for their owned vehicles. Insurance coverage is important to have when an employee driving a company vehicle causes an accident leading to bodily injury or property damage.
However are business owners equally aware that they may be responsible for the actions of their employee driving non-owned vehicles? Some of those situations can include:
- An employee driving their own vehicle and running an errand for the company
- Use of an employee’s vehicle to deliver pizza for a pizzeria
- The rental of a bus by a religious institution for a church event
Courts of law have held that an employer is liable for the employee’s careless or negligent acts when an employee is engaged in the duties required by their employers business. This responsibility extends to non-owned vehicles used by employees on an employer’s behalf.
The insurance industry has responded to this exposure; Non-owned Automobile insurance is designed to protect individuals and commercial organizations from actions brought against them as a result of the use of operation of automobile or trailers not owned by them.
Most commercial insurance policies include Non-Owned Automobile insurance coverage as part of the policy. Coverage is a separate policy addendum usually included in the Commercial General Liability section of the policy. Coverage is included for a nominal additional premium. The limit of liability is generally the same as the Commercial General Liability occurrence limit.
Non-Owned Automobile coverage is or can be subject to the following endorsements:
#99 – Excluding Long Term Leased Vehicle Endorsement – coverage does not apply to long term leased vehicles (leased for periods in excess of 30 days)
#96 – Contractual Liability Endorsement – important to ensure this endorsement is included as it provides coverage for liability assumed by the business owner under any contract or agreement which is specifically excluded under the policy
#94 – Legal Liability for Damage to Hired Automobiles Endorsement – provides coverage in respect to loss or damage to non-owned Hired automobiles for which the insured is legally liable or contractually liable. Physical damage coverage to a rented, hired or borrowed vehicle can be added
The Insurance industry claims experience for Non-Owned Automobile has generally been good. However when there is a claim, it is normally a large one. So it is important for a business owner to ensure that his/her insurance policy provides insurance protection for employees driving their own vehicle or the rental of vehicles for company business. Non-Owned Automobile insurance provides this liability protection. Make sure it is included with your business insurance policy.
Contact our brokers at Morison Insurance to review your options on adding Non-Owned Automobile insurance to your policy.
– Written by our brokers George and Litsa
This blog is provided for information only and is not a substitute for professional advice. Please call our Morison Insurance brokers at 1-800-463-8074 for more information.