Recently an insured contacted us to ask if he had coverage for rental cars being driven by his crew members. Of course this led to many more questions, as well as the insurance agent’s favorite response: “Maybe, depends on what you are doing. Let’s talk about it.”
Our insured had just a commercial hull with P&I policy. I explained that if his crew members were using the vehicle to run errands for the boat − in service to the ship − then there could be coverage for remedies should the crew member be injured while driving. But should the crew member be involved in an accident, there would be no coverage for any damage to the vehicle or for third party damages. This would fall under vehicles coverage.
There are several ways to take care of this with a rented vehicle. First is to take the coverages offered by the rental company. While no one likes to have extra fees added to an already expensive bill, this is often the easiest solution should there be an accident. Adding Hired and Non-Owned Auto coverage is another solution. While there would be no coverage for damage to the rented vehicle or the employee driving it , there would be coverage for the vehicle hit or the driver of that car.
The non-owned portion of this coverage comes into play when an employee uses their own (personal ) vehicle for company work. While the insurance on the vehicle is primary, should the claim exceed the limits the employee has, then the non-owned coverage would kick in. Also if your business ends up being dragged into the claim and you get sued, then your non-owned coverage will respond as well.
Hired and non-owned auto can usually be added to a liability policy, an existing commercial auto policy or, if needed, written as a stand-alone policy.
One other area to consider are trailers owned by the business. These need to be specifically listed on a commercial automobile policy for liability coverage to respond. And remember, the liability of the trailer follows whatever vehicle it is attached to. If you have an employee towing a company-owned trailer with his or her personal vehicle and the trailer causes a claim, then the employee’s insurance will be the primary coverage.
Having an employee run down to the marine supply store in their own vehicle can be a common task but can leave you vulnerable to unforeseen risks. Have a chat with your agent to help plug those holes.