No company owned vehicles? You still need this Commercial Auto coverage

Posted by John Cofini on Tue, Jul 09, 2013 @ 02:07 PM

Almost every business operating today has exposure for this commercial auto liability, and frequently for physical damage as well, even when the business doesn’t own any autos. And this exposure is almost always underestimated by business owners.

What is it?

Hired and Non-Owned Auto Exposures

It seems logical on its surface: you don’t have any company owned automobiles, so your New York business insurance doesn’t need to include commercial auto coverage, right?

Not so fast.

Have you ever had an employee run an errand for the company using his or her own personal vehicle? Do any of your employees travel and rent autos for company business? Businesses and organizations do this every day. And every time it happens, the business is exposed to a potential liability.

After all, if your employee has an accident and causes bodily injury or property damage to a third party while driving their personal vehicle on company business, you’re probably looking at a lawsuit. And while the individual’s personal auto policy would provide the primary coverage, it wouldn’t cover your business if you’re named in a lawsuit.

Or worse, imagine this scenario …

As the owner of a company with “no owned autos,” you’re involved in a serious accident – and the claimant realizes that you have most of your personal wealth in your company. It’s almost a sure bet that the claimant will include your company in the lawsuit. And if you don’t have specific coverage for non-owned auto liability, you could be on the hook.

An even worse scenario …

You send an employee to rent a box truck to pick up supplies for the company. While en route, he accidentally strikes a tow truck operator standing next to a disabled vehicle on the side of the road. The tow truck operator dies from his injuries, leaving a wife and children behind. During the accident investigation, your employee admits he was uncomfortable driving a truck of this size, and that he was tired and may have fallen asleep at the wheel. The police cite him for driving too fast for traffic conditions. Since your employee doesn’t own a vehicle and has no auto insurance, the family of the tow truck operator sues you, alleging wrongful death and negligent supervision. Punitive damages can push the liability into the millions.

These are the kinds of unexpected surprises that can drain your profits in a hurry, and even put you out of business.

How do you protect yourself?

The best way to avoid these surprises is to add Non-Owned & Hired Auto Liability coverages to your New York business insurance. Non-Owned & Hired Auto Liability covers bodily injury and property damage caused by a vehicle you hire (including rented or borrowed vehicles) or by non-owned vehicles (including vehicles owned by your employees). These coverages are usually added as endorsements on your General Liability policy, and they meet contract requirements for Commercial Auto coverage when your company has no vehicles titled in its name.

In today’s litigious society, it’s almost inevitable that accident claimants are going to seek recovery from as many sources as they can tap into. With so much at stake, it doesn’t make sense to leave your business vulnerable to this potential liability.

If you want to steer clear of these roadblocks, see the New York business insurance experts at BNC Insurance and Risk Advisors. We’ll make sure the road ahead is clear so your business keeps rolling along. 

Also, don’t forget to download our free report “Ten Unexpected New York Business Exposures that can Obliterate Your Profits in the Blink of an Eye” and discover costly exposures your business needs to avoid.

Tags: new york business insurance, commercial auto coverage, commercial auto insurance, Non-Owned & Hired Auto Liability coverage, non-owned & hired auto liability, new york business insurance experts