Many Non-Profit organizations will utilize the vehicles of its employees and volunteers in the course of doing business. These organizations need to know the exposure they create when doing so, how the organization can be covered and how that affects premiums.
An employer can be held liable for the actions of its employees and volunteers while driving on the employer’s business. This is known as Non-Owned Auto Liability. Any time an employee or volunteer operating his or her own vehicle on organization business is involved in an accident, the organization will almost certainly be sued. Employer’s Non-Owned Auto coverage protects your organization in the event that it is named in a law suit arising out of the use of a vehicleown ed by an employee or volunteer driving on behalf of your organization.
This coverage is designed to protect only the organization, not the employee or volunteer operator of the vehicle. It also does not pay for damage to the vehicle being driven by the employee or volunteer.
The employee or volunteer’s Personal Automobile policy provides their coverage.
Non-Owned Liability coverage can be written either as a part of the automobile policy for the organization’s vehicles or as a part of the organization’s General Liability policy, if the organization does not own any vehicles.
Important: Remember that a loss suffered by an employee or volunteer utilizing their personal auto for organization business will affect the future premium of their own policy just as it would if they suffered a loss not related to organizational business.
Recommendations:
1) Personal auto use should be restricted where possible (use organization vehicle for medical appointments, deliveries or pick ups or any time consumer transported).
2) Employees and volunteers using their personal vehicles for organization business should be reviewed as any staff member using an organization vehicle would:
- MVR checked and analyzed on annual basis.
- Ensure proper driver training to include DDC, PAT, Emergency Evacuation, other
- Annual Update of primary insurance and MVR
- Follow organization’s standard policies and procedures when using personal vehicles; ie: driver eligibility, use of seatbelts, etc.
3) Employees and volunteers using a personal vehicle should provide proof of insurance, confirmation that there are no exclusion regarding vehicle use, proof of inspection and the organization should determine appropriateness of personal vehicle (condition, type, etc.)
4) Organizations should have a policy in place to require both employees and volunteers to maintain minimum liability limits on their personal auto policies. The preferred limits should be at least $300,000 unless the person is transporting clients, in which case the limit should be $1,000,000.
5) Insured’s can institute periodic checks on employees’ and volunteers’ personal insurance and require copies of their declaration showing limit of liability carried.
RMG Insurance, with offices in Warrington and Bethlehem, PA specializes in assisting Non-Profit Organizations with their insurance needs. If you have questions about this article or have any question in regards to how your Non-Profit insurance is structured, please feel free to contact us. We understand the financial stress Non-Profit organizations are under and look for ways to better protect your organization AND reduce your insurance costs.
