The Road Less Risky

Did you know that car accidents are the number one source of workplace fatalities?

In today's dynamic business landscape, companies face a myriad of risks, some of which might not immediately come to mind, with hired non-owned auto liability being one of them.

Hired Non-Owned Auto Liability is an exposure that demands attention and proactive measures to safeguard businesses from financial and legal pitfalls.

The liability for ANYONE operating a vehicle on company business ultimately falls on the company.

In this newsletter, we'll delve into what this coverage entails, the risks of going uninsured, and why it's essential for businesses to consider as a part of their overall risk management approach.

What is Hired Non-Owned Auto Insurance?

Hired Non-Owned Auto Insurance provides coverage for vehicles your company rents or employees use for business purposes, but that aren't owned by your business.

This could include rental cars or employees' personal vehicles used for work-related tasks.

The Risks of Going Uninsured:

Choosing not to invest in Hired Non-Owned Auto Insurance can expose your company to significant financial and legal risks.

If an accident occurs while an employee is using a rented or personal vehicle for work purposes, your business could be held liable for damages, medical expenses, and legal costs.

So, How Does This Play Out in a Claims Scenario?

1. Rental Car Accident: Imagine an employee rents a car for a client meeting. On their way, they're involved in an accident, causing injury to the other driver and significant damage to the rental car. Your company could be responsible for covering medical bills, repair costs, and potential lawsuits.

2. Employee Personal Vehicle Incident: An employee uses their own car to deliver a company product to a client. While en route, they rear-end another vehicle, resulting in injuries to the driver. Your business could be held liable and without insurance, this could result in significant balance sheet exposure.

Factors Amplifying Exposure:

Several factors amplify the exposure to Hired Non-Owned Auto Liability:

1. Lack of Control: Businesses have limited control over employees' personal vehicles or the maintenance of rental cars, increasing the likelihood of accidents.
2. Liability Limitations: Employee negligence or reckless driving can expose the company to extensive liability claims.
3. Regulatory Requirements: Some jurisdictions mandate businesses to have coverage for such risks, which might result in legal penalties for non-compliance.

Mitigating Risks and Protecting Your Business:

1. Comprehensive Insurance Coverage: Acquiring Hired Non-Owned Auto Insurance is paramount. This specialized coverage helps companies mitigate the financial impact of accidents involving hired non-owned vehicles.
2. Employee Training: Properly educate employees about safe driving practices and the importance of adhering to traffic laws. This can help reduce the likelihood of accidents caused by negligence.
3. Rental Vehicle Inspections: Before renting vehicles for business use, conduct thorough inspections to identify any existing damage. This documentation can prevent disputes and protect your company from unfair claims.
4. Clear Policies and Procedures: Develop comprehensive policies outlining the acceptable use of personal and rented vehicles for business purposes. Clearly communicate expectations and consequences to employees.
5. Regular Vehicle Maintenance: If employees use their personal vehicles for work, encourage them to maintain their vehicles in good condition. Regular maintenance reduces the risk of accidents caused by mechanical failures.
6. Contractual Safeguards: When renting vehicles, carefully review rental agreements and contracts. Ensure they include provisions that clarify each party's responsibilities in case of accidents.
7. Risk Assessment: Regularly assess your company's exposure to Hired Non-Owned Auto Liability. Identify areas of vulnerability and implement strategies to mitigate these risks.
8. Consultation with Experts: Seek guidance from insurance professionals who specialize in commercial insurance. They can tailor coverage to your specific needs and provide valuable insights on risk management strategies.

If you are unsure about your hired non-owned exposure or simply want a complimentary review of your auto policy, please don’t hesitate to reach out to me.

Madison.Urtso@marshmma.com

214-226-2809