Carrie Reynolds

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Save your business. Before it’s too late…..

Save your business. Before it’s too late…..

Here’s the scenario: you own a gift shop. You’re hosting a customer event complete with refreshments and realize you’re going to run out of cups & plates. Problem is, you can’t leave the event. So you send your employee to the store to pick up the supplies. She jumps in her car, promptly runs a red light and T-bones another driver. The other car sustains massive damage and all occupants are sent to the hospital.

Come to find out your employee carries only state minimum liability limits (Ohio’s is $12,500 per person/$25,000 per accident bodily injury liability and $7,500 property damage), or heaven forbid, is UNINSURED. The horror, the horror……

Questions to ask:

  1. Who’s fault is the accident?
  2. Does the employee’s personal auto policy cover a situation like this?
  3. How does the employer become involved?
  4. How will the employer’s insurance respond?

 Commit these words to memory- Non-Owned and Hired Autos liability.

 

The answers:

Question #1- I think we can all agree the employee is at fault.

Question #2- generally speaking, a personal auto policy does not cover business use of an auto, especially if it’s business use for someone else.
 
Question #3- the employer becomes involved because the employee was acting within the scope of her employment. If the employer hadn’t asked the employee to run the errand for the business, the accident wouldn’t have happened.
 
Question #4- ah, this is the kicker. AND not when you want to find out you have no coverage for this type of situation. The coverage that would respond to this situation is……drum roll please……(hint, it’s what I asked you to commit to memory)- yes, we have a winner…..non-owned and hired autos liability.
 

So what the heck is non-owned and hired autos liability and how can it help me?

In its most basic form, here’s what it does:

It adds bodily injury and property damage liability coverage for the following:

  • autos you lease, hire, rent or borrow” (not including any auto you lease, hire, rent or borrow from any employee, partner, member (LLC) or members of their households). 
  • autos that you do not lease, hire, rent or borrow that are used in connection with your business. 

Some small business policies may include it within the policy, some may require you to purchase it separately (good news, it is very inexpensive considering what you’re getting).

The point of this post is to get you thinking and have a conversation with your insurance professional. If you’re a business owner, I know you’ve had an employee run an errand in his or her vehicle.

Heck, I’ve done it.

If you do nothing else from this post, contact your insurance professional and ask if you have non-owned and hired autos liability.  Ask if you need it. Just ask. I want you to have the conversation now before it’s too late.

Questions? Comments? I always appreciate your feedback and thanks for reading.

 

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