An Auto Insurance Coverage EVERY Business Must Have

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Your employees get together to eat in for lunch and there’s a special at the restaurant in the next town. They order over the phone and one of the group volunteers to pick up the food in their personal car. She’s in a bit of a hurry and on the way rear-ends another vehicle causing damage to her car and the one she hit.

It also turns out that the person in the other car suffered a severe neck injury. Your employee is ticketed for following too close and ends up getting sued by the driver of the other car.

But, your company also gets sued because your employee was driving on company business. She was picking up lunch for your employees on company time. What happens to you and your company?

The problem with situations where a vehicle not owned by the business gets used for business purposes puts you at great risk. There is, however, a solution.

How Hired & Non-Owned Auto Coverage Protects Your Company

The situations where a vehicle not owned by your business gets used for your business usually include:

• Non-owned: An employee conducts business for you in their car, making a delivery, a sales call, or even picking up lunch for fellow employees.
• Hired: You rent a vehicle on a business trip.
• Hired: You rent a U-Haul to deliver a product to your customer.
• Non-owned: You borrow someone else’s vehicle, usually a truck, to haul something or make a delivery for business.

Get Hired Auto to Include Coverage for Vehicles Leased or Rented

First off, a hired auto as defined in the Commercial Auto Policy is one you lease, rent, hire, or borrow. This does exclude any auto you lease, hire, or borrow from an employee, partner, member (limited liability company) or a member of that person’s family. In other words, you lease from an entity completely separate from your company.

The coverage is included for you, the named insured, and to anyone else driving with your permission. So, an employee representing you at a convention driving a rented car is also covered.

The standard Hired Auto Coverage does not include damage TO a vehicle you rent. You can choose to cover this physical damage exposure by adding Comprehensive and/or Collision coverage to your Hired Auto. This coverage may include “Loss of Use” for a rental car company’s charge to you for the time their vehicle is being repaired.

Hired Auto Coverage may be automatically included in your Commercial Auto Policy. However, some auto policies cover just the bare minimum, so give us a call about Hired Auto Coverage to avoid the risk of a lawsuit because of a rented vehicle.

Non-Owned Auto Covers You When Employees Drive Their Car for Your Business

The Non-Owned Auto Coverage kicks in when an employee uses their personal auto for business. An employee could use his/her personal car for sales calls, deliveries, or, as we talked about above, just picking up lunch for fellow employees.

This is a lot to absorb in one post, so your best bet is to give us a call about your company’s Commercial Auto Policy and how vehicles are used for business purposes.

Until next time,
SWZ Commercial Insurance Team

Scalzo, Zogby & Wittig, Inc. is your New Hartford area independent insurance agent. Call us for a quote on insurance for your home, car, business, or life at 315.792.0000.