Non Owned Auto Liability? But My Business Doesn’t Own Vehicles?

We know what is going through your head, “autos, but we don’t own no stinkin’ autos.”

When reviewing insurance polices for private companies or non profits, clients often ask: “Why do I need automobile coverage?  We don’t have any autos”.   The answer is that your company can be held responsible for liability arising from your employees’ use of THEIR own personal automobile while on your company’s business.   Seem unlikely?  It’s not.  In fact, some claims adjusters maintain that injury claims paid as a result of employees use of their own personal autos on company business are one of the most prevalent claims they see, even though the employee is properly and personally inured.

It works like this.  Your employee drives his or her auto to the office supply store to pick up some copy paper.  On the way there, the employee runs into a school bus.  The attorney for the injured children will sue the driver (your employee) and his or her personal auto policy will respond.   However, once the attorney ascertains that the employee was “on the clock” working for your company at the time of the accident , the attorney will sue your company (the employer) on behalf of the injured passengers.

Since auto accidents are some of the most costly of liability claims due to the seriousness of injury that can occur, it is important that your company have the coverage (and the defense) to protect itself from these types of liabilities.  Remember,  this coverage does not protect the employee; their personal auto policy does that. Instead, “non owned” auto coverage is in place to protect (and defend) your company from suit due to the employees actions while driving on behalf of your business.

The solution is to include “non- owned” auto liability coverage on your general liability policy (if you do not own autos) or (if you do own autos) on your auto policy. “Non owned” Auto liability is routinely written at limits of $1,000,000 per occurrence and included under the company’s umbrella (excess) policy.  This allows higher limits where needed and keeps the carriers attorneys defending your interests.

Any questions regarding this? Give Jeff Schilling, AAI a call at 301-948-5800 x153 or email at


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