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Please note: J. Michael Low is the founding partner and a full time attorney with Low & Childers, PC of Phoenix, AZ. He is still practicing full time and has agreed to help Low & Johnson on certain coverage and claims issues relating to insurance. He is not issuing legal opinions or legal advice on behalf of Low & Childers. Mr. Low is a licensed property and casualty producer in the state of Arizona.
Non-Owned Auto Liability Coverage –(For your Corporation or LLC) If you are a corporation or LLC, you need this coverage. It protects you if an employee of your corporation or LLC is involved in an at fault accident while driving their own car on company business and your corp. or LLC is brought into the law suit. Your employees policy will protect your employee, however, they will normally not carry high enough limits to provide the protection for your business. If you are doing business as an individual, you should make sure your personal auto limits are high enough to provide coverage for you as a business owner.
Hired Auto Liability Coverage –(For your Corporation or LLC) If you are renting cars in your companies name, this will provide the liability coverage so you can bypass purchasing liability at the rental desk. There is also coverage available for hired car physical damage. If you are frequently renting cars it may be more economical to add these coverages to your commercial auto policy. Note – you need to rent the auto in the name of the corporation or LLC to use these coverages.
The Non-Owned and Hired Auto Liability coverages are written as one endorsement that is usually attached to your general liability policy, you will need to request this from your agent. If the insurance company will not add this as an endorsement to your General Liability policy, you will need to have a commercial auto policy in place in order to add this endorsement. The Hired Auto Physical damage is only available as an endorsement to your commercial auto policy.
Drive Other Car Coverage –(For your employees) This coverage is available as an endorsement on your commercial auto policy for your employees. If the employee has a personal auto and a personal auto policy, there is no need for this coverage. If the employee does not have a personal auto policy and the employee is relying upon your commercial auto for transportation during non-business hours, then your employee needs this coverage. The difference between a Commercial auto policy and a personal auto policy is that on the commercial auto policy the coverage is for anyone who is driving the vehicle that is scheduled on the commercial auto policy. On a personal auto policy while, the vehicle is identified, the coverage is available to the named insured and anyone else in the family of the named insured, while they are driving any other car whether scheduled or not. Each individual will need to be named on the Drive other Car endorsement for this coverage to apply to them.
Please call if you have any questions regarding the coverages discussed above.