Every state, with the exception of New Hampshire, requires all drivers to carry auto liability insurance. Coverage is flexible. It may be purchased as a separate policy or as part of a package of coverage that can also protect buildings and business property (equipment, furniture, etc.).

 

What is covered under an automobile insurance policy?

Liability covers the costs of damage that you may do to others, including property damage and bodily harm.

Medical Payments compensates for medical expenses for the driver and his/her passengers as a result of an accident, regardless of who was at fault.

Uninsured Motorist coverage coverage pays for medical bills if you are hit by a driver who does not have automobile insurance or if you are involved in a hit and run accident.

Underinsured Motorist coverage takes effect when you are hit by a driver who does not have enough automobile insurance to cover all of your medical bills.

Collision coverage pays to repair your own vehicle after an accident.

Comprehensive coverage pays for damages to your car that were not caused by an accident, such as fire, theft, vandalism, natural disasters, hitting an animal, etc.

Non-owned & Hired Automobile Liability

There are many situations that present a potential for your business to be held accountable for the actions of your employees while they are driving their own vehicles:

  • Do administrative employees use their own vehicles to go to the post office or bank on your company’s behalf?
  • Do you occasionally send an employee to pick up a visiting client at the airport?
  • Have you sent employees to pick up lunch, drop off mail or pick up office supplies?
  • Have you ever rented a vehicle while on a business trip?
  • Do you have a sales force to which you provide a car allowance for business use of their personal vehicles?

If an employee has an accident under any of these situations, your business can be held accountable and sued for damages. Basic business automobile policies only cover employees while they operate company-owned vehicles to perform company business.

Your best protection: non-owned and hired automobile liability coverage. This type of coverage will kick in if there is an accident and your company is found legally liable. Typically, an employee’s personal automobile insurance will provide primary insurance to both the employee and the business if the employee is using their own vehicle on company business. However, there is the chance that charges will exceed the employee’s policy limit and would then be passed on to the company. Without non-owned and hired automobile liability coverage you may be vulnerable to a potentially costly exposure.

Non-owned and hired automobile liability insurance covers bodily injury and property damage caused by a vehicle you hire (including rented or borrowed vehicles) or caused by non-owned vehicles (vehicles owned by others, including vehicles owned by your employees). This coverage is typically added to your business automobile policy; however, it can be added to your general liability policy if you do not have a business automobile policy.

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