Non-Owned Auto Coverage

Employees routinely use their personal vehicles in their jobs or just to run errands for their employer. Does your company have protection in case of an accident, and both your worker and your company are sued? If your company has a business auto policy, it should include coverage for ‘non-owned automobiles. Generally, a business auto policy only protects against losses involving company-owned vehicles, so it is essential to add “non-owned” coverage.

Basic business auto insurance only covers employees while operating a company-owned vehicle to perform company business. An employee’s personal automobile policy may exclude business use, so a coverage gap may exist if an employer’s vehicle policy is not modified to handle non-owned vehicles.

What to Consider:

Another important consideration is whether the amount of non-owned coverage is sufficient. Any non-owned auto liability limits should be high enough to protect both the business and the employee. A company has to evaluate its particular coverage need to determine the proper level of coverage. Including ‘non-owned’ auto liability coverage on the business policy will provide coverage for the business over any deficiency in the limit from the employee’s personal auto policy. This is coverage for the BUSINESS, not the employee.

If the company does not own any automobiles, it is possible to purchase business auto liability coverage for only the danger of loss involving its use of ‘hired and non-owned’ vehicles. The ‘hired’ portion would cover business travel and vehicle rentals; the ‘non-owned’ part would cover employees using their own auto in the business.

Even if a business rarely uses non-owned autos, it only takes one serious accident to create a significant loss for the business. You should find an opportunity to discuss this coverage with your Hertvik Insurance Group professional.