Non-owned Auto Liability Insurance

Yes! It’s important that you have non-owned automobile insurance even if you’re sure that your employees have vehicle liability insurance of their own. The world is becoming increasingly litigious and liability claims as a result of automobile accidents are getting more and more expensive. These increasing claim costs may result in your employees being underinsured. If an accident occurs while the employee is using their own vehicle to perform business related activities, and the liability limit that they have chosen is less than what is needed to cover the costs of the claim associated with said accident, then you could be on the hook for the remaining amount of these potentially very expensive claims. It’s important to obtain non-owned automobile insurance to protect against this.

Like most insurance policies, there’s no set answer to this question. Insurance premiums depend upon liability factors such as claim history, revenues, exposure to risk, and much
more—non-owned automobile insurance is no exception. In some cases insurance companies will include non-owned automobile insurance
coverage as a part of their commercial general liability package without additional charges. However there are insurance companies that will either charge increased premiums to add this coverage or exclude it completely if the company has an increased non-owned automobile liability exposure (eg. A restaurant where the employees deliver food using their own vehicles).

Here are some real world examples of situations that may cause a non-owned automobile liability claim to arise:

1. A senior partner’s meeting is being held at a law firm. One of the executive assistants, Krista, is given the company card and asked to go pick up coffees and baked goods for the meeting. On her way to the coffee shop she rear ends a vehicle that stopped suddenly in front of her.
2. A pizza shop has a delivery vehicle in the company’s name, but it won’t start. The manager asks if one of the employees can make the deliveries with their own vehicle until they can get it fixed. The employee agrees, and on the last delivery they hit a car while backing out of the driveway.
3. After working at one location all morning, a residential construction company asks one of its plumbers to go to another job site to help get the construction back on schedule. On his way there, he sideswipes a vehicle in his blind spot.