A client contacted us recently to find out if he had coverage for rental cars driven by his crew members. This led to more questions, including the insurance agent’s favorite answer: “Maybe, it depends on what you do. Let’s talk about it.”
The insured only had a commercial hull with a P&I policy. I explained that if his crew were using the vehicle to run errands for the boat – in the service of the ship – then there could be cover for remedies if the crew member were injured while driving. But if the crew member was involved in an accident, there would be no coverage for any damage to the vehicle or for damage to third parties.
This would fall under vehicle coverage.
There are several ways to take care of it with a rental vehicle. The first is to take the guarantees offered by the rental company. While no one likes extra charges on top of an already expensive bill, it’s often the easiest solution in the event of an accident. Adding “leased, not owned automobile” coverage is another solution. Although there is no coverage for damage to the rented vehicle or the employee driving it, there would be coverage for the vehicle struck or the driver of that car.
The non-owned portion of this coverage kicks in when an employee uses their personal vehicle for company work. Although vehicle insurance is primary, if the claim exceeds the employee’s limits, non-owner coverage would kick in. Additionally, if your business ends up being drawn into the claim and you are sued, then your non-owner owned coverage will also respond.
The leased, non-owned automobile can usually be added to an existing liability insurance policy, commercial auto insurance policy, or, if necessary, written out as a policy.
Another area to consider are company-owned trailers. These must be specifically listed on a commercial auto insurance policy for liability coverage to meet. And remember that the liability of the trailer follows the vehicle to which it is attached. If you have an employee towing a company-owned trailer with their personal vehicle and the trailer causes a claim, the employee’s insurance will be the primary coverage.
Bringing an employee to the marine supply store in their own vehicle sounds simple, but it can expose you to unforeseen risks.