When might a Commercial Cleaning or Janitorial Services Company need Hired and Non Owned Auto Insurance?
Hired and Non Owned Auto Insurance is a type of Commercial Auto Insurance designed specifically for businesses that have employees who drive rented vehicles or the employees personal vehicles as a part of their daily responsibilities. If this applies to your business, you should speak with your independent insurance agent about whether or not you need this coverage.
Hired and Non Owned Auto Insurance will reimburse your business for losses sustained by your business from damages to third parties that are the result of a car accident that is the fault of an employee. This can occur from something as simple as you sending an employee to the store to get snacks for the rest of the staff or to the bank to get some change on a busy day. When the employee is behind the wheel while on the job, the liability to third parties is the liability of the business.
It is important for you as a commercial cleaning or janitorial services business owner to understand that personal auto policies have exclusions that limit or out right negate coverage for vehicles being used for business purposes. Even if the personal auto policy of your employee does not have this exclusion, most personal auto policies are purchased at the state minimum liability limits. This limit will not cover most of the expenses of a crash when a vehicle is totaled or someone has to spend time in the hospital. When you purchase Hired and Non Owned Insurance for your business it will either replace or overlap the employees personal auto policy when an accident occurs.
It is important to remember that Hired and Non Owned Auto Insurance only covers vehicles the business does not own. If your employees are using
Examples of the need for Hired and Non Owned Auto Insurance
✓ Cleaners driving to appointments at remote locations
✓ Running business errands for boss
✓ Picking up lunch for office event
✓ Taking mail to the post office
✓ Renting a car while travelling out of state
Cleaners driving to appointments at remote locations
When you require employees to utilize their personal vehicles to drive from one location to another throughout the day the business is liable for damages that occur from an accident they cause. This is because the primary reason the employee is behind the wheel in the location they are, is because of the actions of the business. Therefore the business is liable for any damages that result.
Running business errands for boss
Once in a while a business owner has an errand they need run and they simply have more important things they need to take care of. When this occurs, it is very tempting to have an employee run the errand for the business. If the business does not have a Hired and Non Owned Auto Insurance Policy, the business is liable for any damage to third parties for damages that occur as a result of a car accident caused by the employee of the business.
Picking up lunch for an employee monthly meeting
Commercial Cleaning and Janitorial Services Companies have employees who work remotely a majority of the time. In order to keep a sense of consistency throughout the company, all staff meetings are necessary from time to time. When a business has these meetings it is common to provide lunch or some snacks for the employees. This may seem like a small activity, but if you do not have insurance specifically for this situation, the owner of the business should pick up the snacks themselves.
Taking mail to the post office
Picking up mail is an additional task that is commonly designated to mid level employees. If a business owns a company vehicle secured by a commercial auto policy, it is important to use this vehicle and not let the employee use their personal vehicle. If the employee does use their personal vehicle the business needs to secure a Hired and Non Owned Auto Insurance Policy or the business is liable for damages caused by the employee in a car accident.
Renting a car while Travelling out of state
Hired and Non Owned Auto Coverage will provide liability protection for the vehicle being rented or borrowed. This liability will not be covered if you only secure a commercial auto policy. A Hired and Non Owned Auto needs to be purchased as an addition or in place of Commercial Auto Insurance.
For most commercial cleaning and janitorial services companies who have employees who use company owned vehicles Commercial Auto Insurance is a must to properly protect the business for liability resulting from automobile accidents. If these employees use their personal vehicles for business purposes, the business needs to secure Hired and Non Owned Auto Insurance or be liable for damages to third parties that result from a car accident caused by your employee. This type of insurance can be added to most Business Owner’s Packages (BOP) or Commercial Package Policy (CPP).