If you or your employees ever drive a vehicle for your business that isn’t listed on your commercial auto policy, then you need to have some combination of non owned auto insurance coverages. Naturally, temporary staffing companies must abide by the same rules as any other type of business when it comes to using any non-owned auto in the course of doing business.
Hired auto coverage can either supplement or replace a car rental agency’s liability coverage, but because this particular policy doesn’t cover physical damage to a rented vehicle, it still makes sense to purchase the rental agency’s physical damage coverage. The purpose of this policy is to provide liability coverage in excess of an individual employee’s auto insurance. The coverage will be engaged if the company is held liable for the employee’s actions involving his or her vehicle and the limits of the individual’s personal auto insurance policy have been exhausted.
Think of non-owned auto as supplemental coverage
This coverage supplements the driver’s own auto liability coverage, just as if he or she were driving a personal vehicle. If your employees use their own vehicles on company business, this coverage is highly recommended. In the event an accident does occur, the employee would still be personally liable for injuries or property damage to third parties. What the temp staff agency needs to understand is that a hired non owned auto policy protects your company should it be sued due to an auto accident while one of your employees is on company business in a personal vehicle.
For example, let’s say that a temp employee is driving his or her own vehicle on agency business and is involved in an at-fault, catastrophic collision. However, unknown to the agency is that the employee’s personal auto coverage has lapsed. The agency’s non-owned policy would become the primary coverage, as would any umbrella policy excess of the non-owned. The full $2,000,000 in available limits would be paid in a settlement involving a structured annuity to take care of the injured claimant over their lifetime. Fortunately for the staffing company no legal expenses would be incurred.
Employer’s non-ownership, hired auto and any auto coverages use limits to describe the maximum amount your insurance company will pay. These limits are automatically the same limits as those you selected for your standard liability insurance.