If you have employees that are furnished a company-owned vehicle, often they do not have an additional automobile and therefore do not carry a personal automobile policy.
If the employee doesn't carry a personal policy and drives a vehicle borrowed from another party-other than the company-issued vehicle drive-other-car coverage affords them protection should an accident occur.
Drive-other-car coverage is endorsed onto your business automobile policy and provides coverage only for scheduled individuals.
How does this differ from hired/non-owned coverage?
1. Hired automobile coverage is provided for vehicles that are leased, rented, hired or borrowed by the insured or its employees for business purposes.
2. Non-owned coverage is afforded to employers when an employee uses their own personal vehicle for business purposes.
Are you covered?
To show how drive-other-car coverage applies, consider the following situations:
1. A salesperson rents a car for personal use on vacation and damages another vehicle. Are they covered?
2. A business owner has all the vehicles titled in the company's name. The owner's family travels out of town on vacation and rents a car, opts not to purchase coverage, and is involved in an accident. Are they covered?
3. An executive borrows a friend's mini-van to move and is involved in an accident. Are they covered?
In all of these circumstances, the business automobile policy provides no coverage since the "covered auto," or company-owned vehicle, was not involved in the accident.
A drive-other-car endorsement closes the exposure loop in these instances.
What steps should I take to minimize exposure?
1. Require all of your employees who are either issued or that will drive company vehicles to have personal automobile policies.
2. Notify your insurance agent of any employees and/or family members that do not have personal automobile policies.
3. Review the coverage provided on the endorsement so that you have a clear understanding of what is included. Coverage can include liability, medical payments, uninsured motorist and physical damage coverage.
4. Review the endorsement to ensure that all employees and/or family members that do not have personal automobile policies are scheduled on the endorsement.
5. Notify your insurance agent of any individuals not shown on the schedule.
