Hired and Non-owned Vehicle Use

Business owners need to protect their businesses from potential costly motor vehicle accidents involving hired or non-owned vehicles. Hired autos are the vehicles a company rents, leases, or borrows for business purposes.

Non-owned autos are vehicles that employees personally own and use to conduct business for their company. Whenever possible, you should only allow drivers to use company-owned vehicles. However, you may find your business relying on employees using their own vehicles, which can expose you to significant hired and non-owned automobile liability.

Businesses will need to take steps to manage this liability exposure. The following best practices can help.

Driver Qualifications

Drivers of personally owned/leased vehicles should meet the same qualification requirements as drivers operating businessowned vehicles.

  • Ensure the driver has a valid driver’s license and obtain a copy (front and back).

  • Obtain a Motor Vehicle Report (MVR) for all drivers under 25 years of age from the state DMV. Do this upon hire and annually thereafter.

  • Conduct a road test of all employees who drive on company business. This provides management a means to determine if the employee is a safe driver.

  • Only allow designated employees to drive.

Employees who do not meet minimum established company criteria should not be allowed to operate vehicles for the business.

Insurance

  • Drivers should be required to provide evidence that they maintain insurance on the vehicle, and the business should keep this information on file. In addition, businesses should consider adding “non-owned auto liability” coverage to their own insurance.

  • Personal auto insurance limits of at least $300,000 is preferred. Consult us regarding limits.

  • The employee’s policy should name the business as an additional insured.

Company Policies

Employees operating vehicles on company business should be required to comply with all driving-related laws and regulations and any business-specified policies, including:

  • Distracted and aggressive driving. Cell phones should not be used while driving.

  • Drug and alcohol use.

  • All occupants of vehicles operated for business purposes should be required to be secured in a safety belt.

  • Employees should be required to sign acknowledgements that they will abide by company driving policies.

  • Vehicles must be registered. If required, they must have a current inspection.

  • Require employees to maintain their vehicle in accordance with the manufacturer’s recommended service guidelines.

Motor Vehicle Accidents

  • Employees operating their owned/leased vehicles on company business who are involved in a crash should be required to immediately report the incident to management.

  • Details of the crash should be recorded by the company in the event the company is involved in future litigation.

  • Drivers should exchange the following information:

    • Driver information – the other driver’s name, address and phone number

    • Vehicle information – plate number and the make, model, year and color of the vehicle

    • Insurance information – carrier name, policy number, effective dates

    • Witness names and contact information

  • The driver should contact their insurance company as soon as possible.

Compliments of Utica National Insurance Company

Dan Zeiler

dan@zeiler.com

877-597-5900 x134

Business Auto InsuranceDan Zeiler