Non-Owned Auto Liability Insurance
If you use your employee’s personal vehicles for business, or more specifically, to deliver products, then getting non-owned auto liability insurance is a smart way to protect your business in the event that the personal auto policy of the driver (employee or subcontractor) denies coverage (because the policy does not extend to business use) or is insufficient to cover the total amount of the claim for damages.
What Non-Owned Auto Liability Insurance Encompasses:
Delivery business owners can choose to purchase their own vehicles to transport items and run errands. In such a case, you would be expected to not only ensure the company-owned vehicles on a business auto policy but also screen all your drivers’ Motor Vehicle Records every six months to ensure that your drivers satisfy the requirements of the insurance company providing the auto coverage.
In most cases, your insurer or insurance broker will do this on your behalf, but it’s best to screen your drivers before hiring them rather than waiting for your insurance provider to disapprove them. Besides the ability to identify good and bad drivers from the beginning, using company-owned vehicles offers other merits such as:
- Peace of mind knowing that the vehicles are properly insured with the right delivery business auto policy
- Access to a greater pool of drivers, since owning a vehicle won’t be a requirement
- Tax ramifications of vehicle depreciation and deducting expenses
However, some employees tend to be careless with company vehicles compared to if they were using their own car. If you allow your employees to use their personal vehicles to deliver products, you will be risking your business unless you obtain non-owned auto business insurance. The problem with personal auto policies, which is the standard auto cover for a personal vehicle, is that the coverage excludes any incidents arising from the vehicle being used for “commercial pursuits.”
In the unfortunate event of an accident and the personal auto policy of the employee either denies coverage or has inadequate coverage limits, the injured party would likely file a claim against you for damages, which can be very expensive. Having non-owned auto insurance would help to pay for the legal expenses and other company liability.
Lastly, keep in mind that non-owned auto liability insurance only pays for property damage and/or bodily injury to third parties. It doesn’t cater for damage to the employer’s car. To ensure that all aspects of your business are adequately protected, please consult an insurance broker for help getting the right coverage for your company.
Get a Non-Owned Auto Liability Insurance Quote
At Brookhurst Insurance, our agents are experienced in Non-Owned Auto Liability Insurance products. We would be happy to discuss customized plans for your non-owned auto liability to be insured properly. This can give you some peace of mind to run normal day-to-day operations without the need to worry about accidents beyond your control. Request a quote online or call 818.465.7860 to speak with a non-owned auto liability insurance agent today!