Non-owned Automobile Exposure
Most non-profits have volunteers and employees using
their personal vehicles for the organization’s purpose such as doing errands,
performing services or transporting clients. If that volunteer should have an
accident while on business for the non-profit there is an exposure. In the
event of a catastrophic accident there may be a law suit against the non-profit
as well as the driver and possibly the owner of the vehicle.
What to do
To protect the organization,
Non-owned Automobile Liability needs to be endorsed to either your commercial
auto or general liability policy. This endorsement extends liability coverage
to protect the non-profit for liability arising out of the use of non-owned
vehicles. But it does not fully protect the owner or driver of the vehicle!
Volunteers and employees of
non-profits need to review their own personal automobile insurance policies to
assure coverage extends to their use on behalf of the non-profit. We recommend
that they carry a minimum of $300,000 liability and $50,000 medical payments.
All personal auto policies will have some form of exclusion for commercial use
of the vehicle that could lead to declination of coverage. You may want to go a
step further to recommend that those using their personal autos receive in
writing from their insurance company, confirmation they are protected under
their personal auto policy when using their car for the non-profit.
What Non-owned Automobile Liability Does
Not Cover
The vehicle itself; the owner himself must cover physical damage to
their vehicle. Non-owned Auto Physical Damage can be obtained to extend physical
damage coverage to volunteers’ vehicles but this is not a common or suggested
practice.
Bodily injury to the volunteer or employee driving is not covered under Non-owned
Auto Liability. Coverage for bodily injury may be provided to the driver
through medical insurance, workers compensation or their personal auto policy
may have medical payments coverage.
Personal exposure from
ownership or operation of a vehicle not owned by the nonprofit; In the case the vehicle’s owner is sued separately
as an individual, coverage does not extend to the vehicles owners’ name.