Auto Liability Coverage Gaps

For some small businesses, there are coverage gaps when it comes to auto liability insurance. This is especially true in situations or accidents where employees are involved, yet company vehicles are not. These incidents are best served by non-owned auto insurance.

What It Is

A non-owned liability policy helps protect your business against financial damages caused when an employee relies on a personal or rented vehicle for business purposes and an accident occurs. This is considered a policy add-on and often used in conjunction with a commercial auto policy.

What It Covers

  • Liability claims
  • Actions of full-time and temporary staff
  • Defense or legal costs

What It Doesn’t Cover

  • Employees (strictly business coverage)
  • Transportation of property
  • Physical damage

Who Needs It

Any company could benefit from a non-owned auto insurance add-on. These are especially useful for staffing agencies or contractor companies relying on the use of employee’s personal vehicles for use during business hours. Other situations that may arise include:

  • A chauffeured or limo ride for clients
  • Office supply or lunch order pick-ups
  • Employees using rented vehicles for business travel

This policy does protect a business in the event of an incident, yet the employee may be personally held liable for any injuries and damages that may have occurred. For this reason, you should asses your current coverage and determine what gaps exist and how best to address them.