Do you ever drive your personal vehicle, on behalf of an organization, as a volunteer or an employee? Are you responsible for an organization that has volunteers or employees that drive their personal vehicles while performing organization business? There are many tasks that fall into this category: drivers could be towing a company owned trailer, drivers could be transporting personnel, drivers could be picking up supplies from the store, drivers could be on their way to a meeting, and the list goes on.
Many people are surprised that the general rule in auto insurance is that the insurance follows the vehicle. That means if your vehicle is liable for an accident, even while “working” for another organization, your personal auto policy will be the first one responsible to respond. So, if you clip a corner too tightly while towing a vehicle, your car insurance responds first. If you cause an accident and someone else is hurt, whether in your car or not, your personal auto insurance is the first one to respond.
Some organization leaders often hear this and initially think, “Okay, that’s great because we do not have any vehicles so I am glad that their insurance will respond.” However, just because you do not own a vehicle, does not mean that you do not have some degree of liability. After all, the person was driving on behalf of the organization. After the personal auto insurance limits are exhausted, it is very likely that the injured parties will be seeking recompense from the organization.
We recommend that businesses (whether for-profit or not) take the following steps to protect the organization from this little-known exposure that can have devastating consequences:
- Have a written policy regarding who can drive and under what circumstances
- Establish a process of reviewing approved drivers’ motor vehicle records
- Require that vehicles not owned by the organization maintain specified liability limits
- Be sure that the organization’s liability policy has a provision to respond to liability arising from non-owned autos
For more information on this subject, or for help implementing a plan to protect your organization, please contact the Merriam Insurance office.