Do your employees ever drive vehicles not owned by your company? This is common, especially in the staffing industry. There are countless situations in which employees drive non-company vehicles for business purposes. Here are a few examples:
- A driver is supplied to ABC Trucking Company.
- An employee rents a vehicle while attending a conference.
- A home healthcare nurse drives from one patient’s home to another.
- A summer intern picks up lunch for the office.
- A staff accountant runs to the bank.
- A temp uses your client’s vehicles for deliveries.
Any one accident involving an employee’s personal auto, a client’s vehicle, or a rented vehicle for business purposes can be costly. That’s where hired and non-owned auto coverage comes into effect.
What is hired and non-owned auto coverage?
This insurance provides liability and property damage coverage for a vehicle owned by an individual other than the company but used on the company’s behalf. It’s intended for incidental accidents, such as those that might occur when you send an in-house employee on an errand. If that employee were involved in an auto accident and the limits of their private policy were exhausted, your hired and non-owned auto coverage would pick up as excess coverage where the other policy ends. Even if you don’t own any business vehicles (and thus don’t have an auto insurance policy), you can still purchase hired and non-owned auto liability, typically added to your general liability or commercial package policy.
What else can I do to protect my company?
Whether you’re placing construction workers driving two-ton trucks or having your employees drive their own vehicles for sales calls, it’s up to you to ensure every possible safeguard is firmly in place. Aside from purchasing hired and non-owned auto coverage, here are additional ways to further protect your company:
- Verify that your inside sales personnel have adequate personal auto insurance.
- Run Motor Vehicle Reports on your temporary employees in driving positions to ensure acceptable driving records.
- Avoid placing youth drivers (under the age of 21).
- Review your client contracts to see if you’re the party agreeing to assume all liability associated with your driver placements.
- Check that clients have insurance coverage for the vehicles your employees are driving, and that the coverage will apply to your employees.
For more information on proper coverage for auto liability, check out our featured article in Staffing Industry Analysts’ Staffing Stream or contact us to work with a Marsh McLennan Agency (MMA) advisor.
