Sending the receptionist out of the office to buy pastries for the morning sales meeting? Having the new intern go out to pick up lattes for everyone hoping he gets the order right this time? An emergency store run by an employee to get copier paper? Do of all these sound like a routine day at your business? For many owners, these events happen all too often. There is a commercial insurance term called Hired and Non-Owned Auto Insurance that addresses auto liability exposure for a business.
If an employee gets into an at-fault accident in their own vehicle, the excess damages will fall on the employer. For example, let’s say our unsuspecting receptionist in the first example hits a car and is at fault for the accident. Any bodily injury she causes to the other person will obviously fall onto her personal auto insurance policy since she’s driving her car. The risk here is what if she causes significant medical damage to the person? Additionally, what if she is underinsured?
Using this example, let’s say the person who is hit has $100,000.00 in medical bills. After Florida Personal Injury Protection (PIP) kicks in $10,000.00, a medical bill of $90,000.00 remains. If the receptionist only has 10 or 20 thousand in Bodily Injury (BI) limits, the actual business she works for can become liable for rest of the medical expenses. Another scary fact of the matter here is that Bodily Injury is not required by the State of Florida. A driver can legally drive around without it. This puts 100% risk on the unsuspecting business of having an employee have an at-fault accident and injure someone.
“But my business already has a Commercial General Liability (CGL) policy.” There is an auto exclusion in most policies written that would not cover this accident listed above into your CGL. Although a business owner has liability coverage that they think covers them, we see an exclusion that by-passes it and lets a huge risk fall onto the business owner.
Hired and Non-Owned Auto coverage needs to be considered even if your place of business does not have vehicles titled in its name. This liability coverage can be written into an existing commercial policy and even be included in your company’s Business Office Liability Policy. Talking to a trusted advisor about your business’s liability insurance can help you avoid this potential gap in coverage.
For additional questions or comments, please contact me at Dimmitt Insurance