Non-Owned Auto Can Be A Janitorial Company’s Hidden Nightmare
Author, Jeremy Hoolihan, Partner, Rancho Mesa Insurance Services, Inc.
It is common for employees of janitorial companies to drive their own vehicles, whether that is driving to various jobsites, transporting cleaning supplies, or simply running errands. For the janitorial company, this creates what is referred to as a non-owned auto exposure.
Often overlooked, non-owned auto liability arises when a business is held responsible for accidents caused by employees driving their personal vehicles while performing duties in the course of employment.
As inflation and nuclear verdicts drive up costs of individual auto liability claims, employers must be concerned not only with company-owned vehicles, but their employees’ vehicles being used on company time. If an employee causes an accident while driving their personal vehicle while on the clock, the injured parties may file claims against both the employee’s personal auto insurance and their employer.
To protect your company from non-owned auto liability, it is recommended that companies have an updated fleet safety program that includes the following:
Employees using their personal vehicles on company time should be required to provide a copy of their MVR. It is critical that the employee’s MVR meets the same parameters as those driving company-owned vehicles.
Employees who drive company and/or personal vehicles should be required to participate in the DMV Pull Program. This way, if an employee received a major moving violation (e.g., reckless driving, DUI, etc.), the company will be alerted.
Require all company drivers who drive non-owned vehicles to purchase personal liability coverage. That way, damages of a claim are less likely to exceed the personal auto liability limit and fall on to the employer’s commercial auto liability policy. It is also recommended that employers require their drivers to purchase minimum limits of $300,000.
Make sure the employee completes routine maintenance as per the car’s manufacturer on their personal vehicle, such as oil changes, tire checks, windshield wiper replacements, etc. This is just as critical as a maintenance program for company-owned vehicles.
Provide regular fleet safety training to all employees driving company and personal vehicles during business hours.
Finally, business owners may want to encourage employees to use safety features such as apps that prevent the driver from using their phone while the vehicle is in motion.
Janitorial businesses, in general, have a large non-owned auto exposure that can often be overlooked and leave a business vulnerable to high dollar auto claims, which can result in policy non-renewal and/or increased premiums.
Now is the time to review your current program’s policies and procedures with your insurance broker and make any adjustments necessary.
If you need any assistance reviewing your current program or have any questions, please feel free to contact me at (619) 937-0174 or jhoolihan@ranchomesa.com.