A review of a commercial insurance program sometimes fails to produce a business auto policy, and it’s explained that “the insured owns no autos.” With few exceptions, operating business entities still face auto liability exposures from non-owned autos, and frequently from hired autos, as well.

In today’s litigious society, accident claimants will often seek recovery from as many sources as can be found. It’s not difficult to imagine scenarios wherein any company with employees (and possibly not even operating from a physical location) can still be sued based on non-owned auto liability in the aftermath of a motor vehicle accident.

The classic example exists of an employee using their personal vehicle for a work errand. At the accident site, the employee mentions, “I was just on an errand for XYZ Company,” and XYZ Company ends up being named in an ensuing lawsuit, particularly if the employee doesn’t have sufficient liability limits on his personal auto policy.

Or what if the owner of a company—still with “no owned autos”—is involved in a serious accident and the claimant realizes the owner has most of his personal wealth in his company? The claimant will likely include the company in his lawsuit, and without specific coverage for non-owned auto liability, the insurance program would not protect the insured in these instances.

Hired auto exposures arise differently, but again, it’s not difficult to anticipate situations where an employee or officer of a company may suddenly need to travel and rent an auto, and if it’s in the course of business, to assume it’s covered by the company’s insurance. Hired auto physical damage exposure occurs here as well, but again, without specific coverage in place prior to an accident, a company may be looking at an uninsured claim.

Almost every operating business entity has liability exposures from hired and non-owned auto liability, and frequently for hired physical damage as well, whether or not the business owns any autos. What’s needed is a business auto policy with symbols 8 (for hired) and 9 (for non-owned) in the liability section of the declarations, along with symbol 8 for both comprehensive and collision. Such a policy can be added for minimal additional premium, especially in times of a soft market or when included as a part of an otherwise-substantial program.

A good commercial agent knows that not only do their clients need this coverage, the lack of the coverage when an exposure exists is a clear selling opportunity with prospects. In other words, the same scenarios that present potential errors and omissions exposures to an agent should also be considered weaknesses that can be exploited by competing (and hungry) agents.

Are you protecting your book the way you should be?