Schweickert & Company — Insurance for Nonprofits & Social Service Organizations

Non-Owned/Hired Auto Liability Insurance

Do your employees or volunteers drive on company business? If so, your nonprofit is legally responsible for the damage they cause if they were to have an accident.

Who is responsible?
It is always important to keep current, accurate records of your staff and volunteers’ drivers’ licenses and proof of auto insurance before you ask them to drive on company business. In case of a collision, their personal insurance policy will act as “primary coverage”, paying for the damages caused. However, if they don’t carry high enough limits (The minimum legal coverage in California is only15/30/5), your nonprofit could be stuck paying the balance of the claim.

What do you need?
One serious accident could be devastating to your organization! The only way to ensure that you won’t get stuck paying out-of-pocket for claims from an accident caused by a staff or volunteer is to carry “Non-Owned and Hired Auto Liability” coverage . This is usually offered as part of your Commercial Package insurance policy, based on your General Liability, or it may be a component of your Commercial Auto Policy.

Commercial Auto policies only cover company-owned vehicles, and while they may pay for damages caused by staff or volunteers driving those vehicles, non-owned vehicles are generally NOT covered. (On a side note, you should be sure that your Commercial Auto policy includes coverage for damages caused by volunteers who drive company cars.)

This is a commercial coverage commonly carried by pizza and restaurant delivery operations. However, if your company does not own vehicles, and/or you rely on staff and volunteers to run errands, attend conferences, or take clients on a field trip in their own vehicles, you should be sure that you have “Non-Owned and Hired Liability” coverage. This will pay for valid 3rd party claims after the limits of the driver’s personal policy are exhausted.

Note: Remember that Non-Owned/Hired is liability coverage only, and does not cover physical damage to the staff/volunteer’s car. If an employee dents his car in a parking lot at Staples, there will be no coverage under this policy.

Knowing you’re covered, you’ll feel better when you ask, “Would you please drop this mailing off at the post office on your way out?”, or “Can you drop these press kits off?”, etc. Don’t take any chances…protect your nonprofit…understand your insurance coverage. We’re here to help you through the maze! Contact your local nonprofit insurance specialist for more information:

Schweickert & Company
15 Peters Canyon Road
Irvine, CA 92606
Direct Phone/Fax: 714-689-1772
Email: Laura@schweickert.com