In most home care and hospice organizations, employees rely on vehicles to provide essential services to clients in their homes. However, when these vehicles are hired or non-owned—meaning they are personal vehicles or rented rather than company-owned—unique insurance exposures arise that require careful management.
Limited control over personal vehicles
One of the primary challenges with hired and non-owned vehicles is the limited control an organization has over the vehicle itself. Unlike company-owned vehicles, where maintenance, safety standards, and usage policies can be strictly enforced, personal vehicles used by employees are outside direct company control.
Dual insurance liability in the event of a claim
When an accident occurs involving a personal vehicle used for business purposes, both the employee’s personal auto insurance and the company’s business insurance may be implicated. This overlap can complicate claims handling and potentially increase liability exposure for the organization. It is critical for homecare and hospice providers to understand how these coverages interact and where gaps may exist.
Limitations of excess and umbrella coverage
Carriers are increasingly limiting their exposure to hired and non-owned auto risks by placing lower limits on these specific coverages. It is essential for organizations to thoroughly review their policies to confirm that excess liability coverage properly applies over hired and non-owned vehicles. Additionally, implementing strong processes such as Motor Vehicle Record (MVR) monitoring and background checks can help carriers feel more confident, potentially enabling access to higher coverage limits.
Requiring personal auto insurance
To mitigate risk, organizations should establish clear requirements for employees who use their personal vehicles for work. This includes mandating that employees maintain adequate personal auto insurance coverage. Verifying that employees carry sufficient limits helps protect both the individual and the organization in the event of a claim.
Challenges and benefits of tracking auto insurance
Tracking employees’ personal auto insurance can be administratively challenging but is highly beneficial. Maintaining up-to-date records of insurance certificates supports risk transfer efforts and demonstrates to underwriters that the organization is proactively managing exposures. This can improve the company’s insurance appetite and potentially lead to more favorable terms.
The value of background checks
Conducting thorough background checks on employees who drive as part of their job duties is another important risk management strategy. Checking driving records and histories can identify potential red flags and reduce the likelihood of accidents caused by high-risk drivers.
Homecare and hospice providers should understand the nuances of liability and coverage limitations to ensure they remain resilient while delivering vital care services on the move.
If you need guidance on managing hired and non-owned vehicle exposures for your homecare or hospice organization, contact an MMA advisor today.
