The Need for Non-Owned & Hired Auto Liability Coverage in Home Health Care Insurance Programs

Very few home health care organizations have a fleet of vehicles at their disposal for employees to use for business purposes. Instead, most employees using their own vehicles to drive to and from a patient’s home, to multiple offices or hospitals, or run errands on behalf of the patient. As a result, providers may not see the need to purchase Commercial Auto insurance to cover the organization in the event one of their employees were in an accident while on the job. In fact, providers may believe the employee’s personal auto insurance is adequate enough to step in to pay for any damages.

However, just like any other business, home health care organizations face auto liability exposures from non-owned vehicles that their employees regularly use for work – perhaps even more so since caregivers and others are driving to and from patients’ homes. Providers can be named in a lawsuit, particularly if a claimant is looking to recover from as many sources as possible for an injury or property damage involving an employee-related auto accident. Employers could be held vicariously responsible in association with the operation and use of the vehicle for business purposes.

To address this exposure, be sure to stress the need for Non-Owned & Hired Auto (NOHA) insurance as part of an insured’s comprehensive coverage. Non-Owned & Hired Auto provides liability coverage for bodily injuries or property damage that the employer or employees cause while driving for work. This protection applies to vehicles the business doesn’t own (like employees’ personal vehicles), or vehicles an employer “hires” (like rental cars). It is designed to fill the gap in an employee’s personal auto liability policy, as coverage is excluded if a personally owned or leased vehicle is involved in an accident while in the course and scope of conducting business. It’s important to clarify, however, that Non-Owned & Hired Auto addresses the company’s liability, not liability for the employee driving the vehicle. The person behind the wheel can still be held personally liable for any damage or injuries they cause.

In addition to securing Non-Owned & Hired Auto insurance, there are measures your home health care insureds should take to mitigate risk. This includes requiring employees to provide proof of their insurance coverage limits at the time of hire and on an annual basis. A current copy of the declarations page of the employee’s automobile insurance policy should be kept on file. It is also smart to make employees aware of the potential coverage gaps that exist in their personal auto insurance policies when using their cars for work. Employees may want to consider purchasing a “business use” endorsement to their personal auto insurance policy. Also, employees operating their personally owned or leased vehicles for work who are involved in an accident should be required to report the accident to management immediately. Details of the accident should be recorded by the home health care provider in case the organization is involved in future litigation.

Reviewing the ins and outs of Non-Owned & Hired Auto coverage with insureds and the importance of securing this coverage serves to mitigate the risks that come with employees using their own vehicles for work – a common practice in the home health care industry. Manchester Specialty specializes in providing total insurance solutions for home health care providers and can help you in placing the necessary coverages to address your insured’s risk profile.  To learn more about our specialty insurance programs, please give us a call today at 855-972-9399.