Businesses that allow their employees to use their personal automobiles for business purposes and businesses that rent autos to use for business purposes both have a coverage gap. These situations can end up with uncovered claims without the right endorsements.
A standard Business Auto Policy covers the autos owned by a business that uses them for commercial activities. However, many businesses also allow their employees to run errands and make business trips with their own personal autos. Some businesses also have friends and family run business errands in their personal vehicles. Additionally, some businesses don’t have company vehicles, but the owners and employees still drive on business. What if one of these people causes an accident?
Hopefully, their Personal Auto Policy would fully cover the resulting liability. Unfortunately, sometimes their Personal Auto Policy denies the claim since they were driving on business, sometimes their liability limits aren’t high enough, and sometimes there isn’t a Personal Auto Policy present at all. In one of these situations, the business could be held liable for all outstanding damages. Coverage for these scenarios can be found in Non-Owned Auto coverage, and it can be an endorsement to your Commercial General Liability or added onto your existing Business Auto Policy.
Hired autos are vehicles rented for business purposes and/or rented in the name of the business. Similar to Non-Owned Auto coverage, the insurance bought from the rental agency might not have sufficient limits to cover accidents, the rental insurance might exclude the type of accident they caused, or the rental agency’s insurance wasn’t bought at all. These situations will often leave the leftover liability to be picked up by the company, which is why there is Hired Auto coverage.
Driving is the most dangerous activity the average person ever does, and incidental business-driving happens for most businesses. Make sure you’re completely protected by adding Hired & Non-Owned Auto coverage to your insurance portfolio.