California Property & Casualty Broker-AgentCasualty InsuranceHard
A business client has a fleet of vehicles and is concerned about the exposure to lawsuits arising from their drivers' negligence. They want coverage that will protect them if their employees use their own personal vehicles for company business and cause an accident. What type of coverage would address this specific exposure?
- AGaragekeepers Coverage
- BDrive Other Car Coverage
- CHired Auto Coverage
- DNon-Owned Auto Coverage
Show answer & explanationAnswer & explanation
Correct answer: D. Non-Owned Auto Coverage
Non-Owned Auto Coverage in a Commercial Auto Policy provides liability protection for the business when its employees use their own personal vehicles for company business, as the business can still be held liable for their actions.
Why the other options are wrong
- A. Garagekeepers Coverage protects businesses that store or repair vehicles belonging to others, such as auto repair shops or parking garages.
- B. Drive Other Car Coverage is typically an endorsement for executives and their families, extending personal auto coverage to non-owned vehicles, not for general employee use of personal vehicles for business.
- C. Hired Auto Coverage provides liability for vehicles leased, hired, rented, or borrowed by the insured, but not owned by the insured or their employees.
Non-Owned Auto Coverage
A type of coverage included in a Commercial Auto Policy that provides liability protection for the insured business when its employees use their own personal vehicles (non-owned autos) for business-related activities.
- Covers business's liability for employee use of personal vehicles.
- Protects against vicarious liability.
- Often included as part of broader commercial auto liability.
Memory trick: Non-Owned Auto: employee's car, company's legal scar.