Are your volunteer drivers covered? Are you?
Do your volunteers ever drive others on your behalf? For example, to go on field trips or site visits or attend offsite meetings? What if your volunteer gets into an accident using their personal vehicle? Most people assume their personal auto insurance policy will cover everything should the driver get into a collision. But what if that driver had minimal insurance, and the injuries to others were extensive? The alleged victims may come after your organization.
This is where a hired and non-owned auto insurance (HNOA) policy would kick in. Hired and non-owned auto insurance (HNOA) covers commercial liability expenses triggered by accidents involving hired (e.g. rental cars) or borrowed vehicles (e.g. employee-owned) for not-for-profit use.
All not-for-profits that rely on rented vehicles to facilitate transportation or ask employees to run errands in their personal vehicles should consider HNOA insurance as a wise investment. In today’s highly litigious commercial auto environment, lawsuits tend to be very expensive, and insurance protection is growing more important than ever.
What does an HNOA policy cover?
An HNOA policy typically covers liability claims and defense costs. It can cover attorney fees, settlements or judgments, and other court costs if the business is sued as a result of the accident. The policy will cover the actions of full-time and temporary or volunteer staff.
HNOA is secondary, and relatively inexpensive
HNOA policies often works on a primary and secondary coverage basis. Meaning, the first policy limit exposed would be the driver’s personal auto insurance. If there were no personal insurance, or if the driver’s limit was not sufficient to cover the injuries, then the HNOA policy would kick in. As secondary cover, HNOA policies tend to be relatively inexpensive. And if you have an Umbrella Liability policy, that could supply additional insurance limits in the event of a bad accident. But has your agent recommended HNOA to your organization?
Commercial auto and HNOA
Commercial auto insurance covers all vehicles that a not-for-profit *owns* and that are used for work purposes. This is different from a HNOA policy, which only covers vehicles that are hired or borrowed by organizations for business use. So even if your organization doesn’t own cars, you should still consider a HNOA policy for your organization’s peace of mind.
Risk mitigation for HNOA vehicles
In addition to having the right insurance, not-for-profits that use hired and employee-owned vehicles for commercial purposes can mitigate some of their exposures by carrying out regular vehicle record checks to ensure their employees have no major driving infractions. They can also enforce strict driver age requirements, driving experience requirements, and so on.
Do you have the right insurance?
Union Bay is here to help your not-for-profit assess the proper coverage needed to protect itself. If you haven’t already done so, try our insurance diagnostic to see if you have protection your organization adequately. As insurance experts that focus on not-for profits, Union Bay is here for you!
But am I really covered?
If you are an executive, board member, or even a volunteer for a nonprofit, and you are responsible for buying insurance for the organization, chances are you are frustrated. Has your agent given you a walk-through of your potential exposures, and then recommended coverages and limits that are appropriate to address those exposures? Or has your agent simply asked, “What coverages do you want?” or maybe slightly better, “Most organizations get general liability. How much limit do you want to buy?”
And your answer is, well, I don’t know. How much do other organizations get?
If you are a small organization, you may be lucky to get that much attention because the agent might see you as a nuisance.
We created Union Bay to address these issues. Nonprofit organizations ought to be entitled to a thoughtful review of their exposures, and a comprehensive offering and explanation of how insurance can address those exposures. It’s not that hard, and we created business logic and AI to make it simple for you to see what to buy, and how much. We created a simple, easy to read format for you to use to help make your decisions, or bring to your Board for consideration. And we’re standing by to help you if and when you need it, with over 80 different insurers competing to offer you coverage.
We hope to make the insurance buying process as simple and efficient as it can be. Give it a try, and let us know what you think.
In future blog posts, we’ll address coverages and some of the issues you should consider as a nonprofit principal. All of our staff are also volunteers in community organizations, so we know what the challenges are. Try our interview process. Or talk to us. We’re here to help!