We are sure that to many of you Hired and Non-owned Autos coverage sounds like another one of those “extra” coverages that insurance companies pile on to make additional money. This mind set is evident in the inquiries we receive where contractors ask if general contractors who require this coverage on their certificate of insurance have a mutually beneficial agreement with insurance carriers? Well, that is not true and after reading this blog, we think that you will find value in this coverage.
Let us begin with some facts from the “2012 Virginia Traffic Crash Facts” on www.dmvnow.com:
– The total number of crashes in 2012 were 123,579 (approximately 10,298 per month or 343 per day)
– 1 crash every 4.26 minutes
– 1 in every 25 drivers was involved in a crash
– 184 people injured per day because of traffic crashes
We could probably cite several such statistics to warn you and that’s without mentioning the use of cell phones while driving. We are sure that most of you are decent drivers and have not been involved in a car crash but the same be said about your employees? Could your business be liable for your employees’ careless driving?
Consider the following 2 scenarios:
- You are the owner of Young’s Electrical Co and you recently hired a new high school graduate as a receptionist. You suddenly feel like having a pizza from Mike’s Pizzeria but because of your busy schedule, you send the new hire out to pick up the pizza in his own vehicle. On his way to the pizza shop, the new hire gets in a fatal crash where he is fully at fault. The claimant(s) sue him for $1 million and includes Young’s Electrical Co. as a codefendant. The policy for this new hire covers up to $50,000 and he only has $50 in his checking account. Do you think that you might be liable for the remaining $949,950?
- Because of a big work project, you are in an urgent need of an extra truck. You rent a truck from Enterprise for a day and as you start driving out, because of the sensitive gas pedal, you hit someone who happens to be a lawyer and takes you to court for $500,000. Whose policy will cover this loss? Once again, if you are liable for the whole amount because you signed a waiver when renting the vehicle, do you have the right coverage in your business insurance policies?
Sure there are some instances where an insurance coverage may seem questionable (ex: non-owned aircraft liability for a pizza shop in Lovettsville, Va.), however, most business owners are exposed to hired and non-owned auto liability claims. Even if you don’t send your employees for business errands, you could easily be involved in a claim. In the case of the new hire example above this is especially true if the individual says that he was working while at the site of the accident! In such a situation, non-owned auto liability could protect all your business and personal assets.
Also, you just may be fooling yourself if you believe that you will never rent or borrow a vehicle during the lifetime of your business!
This is why these two types of coverage are important and can easily be added in most business owner policies and business automobile policies. Please consult a McLean Insurance adviser for more information.
McLean Insurance specializes in reviewing the overall needs for your business and making a proper recommendation. Independently representing multiple top carriers in the market, we can find and customize a hired & non-owned auto coverage plan that meets your needs and fits into your budget.
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