UPDATED: June 6, 2017
Business Non-Owned Auto Insurance Doesn’t Cover the Driver
While some home health care agencies may occasionally own a fleet of vehicles available to their employees for transportation to and from each patient, it is far more common for employees to use their own personal vehicles for company business. As a result, many home health care business owners mistakenly believe that they do not need their own insurance coverage since they have no “owned” autos to protect. However, the fact is that business entities still face auto liability exposures from non-owned autos, which their employees regularly use in the performance of their job duties. Almost every operating business entity has a liability exposure for non-owned and hired auto liability (NOHA), and home health care providers are no exception.
Accident claimants often seek recovery from as many sources as possible when they have suffered a property loss or medical injury from an auto accident. As a result, it is not uncommon for businesses to be named in a claim or sued based on the non-owned auto liability exposure when their employee becomes involved in an auto accident. When it comes to utilizing vehicles for business and work activities, an employer can be held responsible for the actions of its employees during the course of their job performance. Employers could also be held accountable for their own negligence in association with the operation and use of the vehicle.
Inside Non-Owned Auto Coverage
Non-owned auto commercial insurance, done right, will cover your business for accidents involving an employee’s use of his or her own vehicle or one leased or rented by your business for use. But it won’t cover the employee’s personal liability. The employee will need to look to his own personal auto insurance for that coverage. And that particular policy will have a direct bearing on how vulnerable your home health care agency is to claims.
A personal auto policy has minimum required limits of liability coverage, depending on state law. But that level—that minimum mandated auto liability insurance—is typically very low and just a starting point for adequate coverage. If your employee has opted for the minimum, which many people do, an accident with a new car or multiple cars or an accident involving both property damage and serious injuries could far exceed the employee’s own liability coverage. That could expose your home health care firm to legal action by victims to cover the gap.
To complicate matters, if that driver is also carrying another of your employees to his or her job site and is injured, the driver would need to look to medical payments coverage, which isn’t mandated in some states. Even if insurers are required to offer the coverage, it may be possible for car owners to reject the medical expenses clause in writing, thereby removing it from their policy and premium. Additionally, if an employee is driving a vehicle he or she rented on his or her own—for example, if the owned car is in the shop—the rental might not be covered under your business auto policy, even under the non-owned clause.
Before allowing employees to drive their own vehicles for work duties, take a look at their insurance policies—or better yet, have your insurance agent do so—to make sure their liability limits and medical payments coverage are adequate. You also need to establish a way to verify that coverage is current and continuous on an annual basis. Clarify the insurance gaps for employees so they fully understand the exposure they have to liability claims, where your commercial auto insurance will potentially kick in, and where they will be left paying “out of pocket”.
In addition to obtaining adequate non-owned and hired auto insurance, home health care companies should proactively implement controls to reduce and minimize risk, such as the following suggestions:
- Identify all employees who operate their personal vehicles for company business. Check for a valid drivers’ license, and keep detailed records about both the driver and the vehicle in use. Some employers require that employees use a single vehicle for all their work-related functions to better manage exposure.
- Check driving record, insurance history and proof of valid personal auto insurance when hiring and screening new care providers. Employers should stipulate minimum liability limits that their employees must carry on their personal vehicles used for work purposes. Implement and enforce consequences for poor driving performance and records.
- Perform inspections of employees’ vehicles (or have written requirements and standards) to determine if they are in good operating condition and that all safety devices, such as headlights, signals, brake lights, backup lights, horn, windshield, etc., are in proper working condition.
- Establish a driver training program for all employees to ensure that conduct expectations are properly set and adhered to by all employees. Implementing these training programs and monitoring employees’ driving performance can help reduce auto liability and also improve workers’ compensation and employee health and medical injury exposures at the same time.
- Keep good records for drivers and vehicles and proper documentation of all procedures.
About Manchester Specialty Programs
At Manchester Specialty Programs, you will find all the business insurance coverage you need to operate your business, and all in one program. We deliver specialty insurance programs that are specifically designed for home care firms in both medical and support roles. Our comprehensive home health care provider insurance program is designed to help these agencies continue to provide the important services they offer throughout our communities, including non-owned and hired auto (NOHA) insurance coverage. To find out more about our operation and all of our specialty insurance programs, please give us a call today at 855-972-9399.