“Non-Owned” auto exposure is created when you have employees working on company business in personal vehicles. This is a significant potential exposure to loss on your Commercial Auto Policy if an employee is involved in an at-fault accident in the course of employment, and the resulting damages are high. If the employee does not have adequate limits of personal insurance to cover the loss, then your commercial auto policy and the non-owned auto coverage you likely have in place will be next in line.
It is important that you require the employees who drive personal autos on company time to carry a high enough limit on their personal auto liability policy. If only state-mandated limits are in place, then there is a very low limit prior to your policy being triggered. You should also ensure that you are doing the proper due diligence in checking motor vehicle records, establishing driver approval and disqualification criteria, rules of use, etc. Lack of proper due diligence can have a meaningful negative impact on your company if a driver with a poor history is involved in a serious at-fault accident on company time.
One issue that often comes up, is the push-back from employees who are going to be required to purchase a higher limit auto liability policy than they may currently have in place. If a driver has a good history, then the relative cost to increase the auto liability limits from state-mandated minimums to a $300,000 or $500,000 combined single limit policy is not that dramatic, but should be considered in your allowance amount.
To learn more about protecting all the exposures of your construction team, visit AssuredPartners NL Construction.Share This: