How does hired non-owned auto coverage work? Many insurance agents picture a single scenario when they hear non-owned automobile insurance: an employee driving a personal car for a work errand. Staffing firms face a wider range of driving exposures than that picture suggests. Their employees may drive personal vehicles, client-owned vehicles, or rental cars while on assignment.
Evaluating how a staffing firm’s employees actually get around, and what contractual responsibilities the firm has taken on, matters just as much as reviewing the policy itself. Hired and non-owned automobile insurance is one piece of a broader staffing agency insurance program, and understanding where it fits helps agents make a more complete recommendation.
Understand Staffing Driving Exposures
A placed employee might drive their own car to a client site, operate a vehicle owned by the client as part of the job, or use a rental car during a temporary assignment. Each of these scenarios creates a different liability picture. The U.S. Chamber of Commerce notes that an employer can be held vicariously liable when an employee causes an accident while driving for work, even if the vehicle belongs to the employee rather than the company.
Staffing firms should not treat these scenarios as interchangeable. A worker driving a personal car to a job site raises different questions than a worker operating a vehicle owned by the client company. Agents need to evaluate each scenario before assuming a single policy covers both. For more on this coverage, see World Wide Specialty Programs’ guide to non-owned auto liability for staffing companies.
Review Client Vehicle Agreements
When a placed employee operates a vehicle the client owns, the client’s service agreement typically makes the staffing firm responsible for the client’s liability if that employee causes an accident while driving the client’s vehicle. That contractual assignment of risk is unusual outside the staffing industry, and it means the coverage conversation has to start with the contract, not just the policy.
Not every hired and non-owned auto policy extends to that contractual liability. Some policies cover a staffing firm’s own exposure but stop short of covering the client’s liability when a placed employee is driving the client’s vehicle. Agents should confirm this specific coverage exists in the policy they are recommending rather than assuming it applies by default.
Evaluate Policy Compatibility
How does hired and non-owned auto coverage apply to staffing firms? Once an agent knows which of the three driving scenarios applies to a given client, the next step is checking whether the policy actually responds to each one. A policy that pays a claim when an employee drives a personal car won’t necessarily extend to a client-owned vehicle or a multi-week rental, so endorsements matter as much as the base policy.
Rental vehicles introduce their own wrinkle. Liability coverage for a rented, or “hired,” vehicle is typically part of a hired and non-owned auto policy, but physical damage to the rental vehicle itself is not automatic. That protection usually requires a specific hired auto physical damage endorsement, so agents should confirm whether a staffing client needs that endorsement based on how often employees rent vehicles for company business.
Ask Better Coverage Questions
A few questions can surface most of these gaps:
- How do employees typically travel to and between assignments?
- Do any placements involve operating a client-owned vehicle?
- How often does the staffing firm’s work require a rental vehicle?
- What do the firm’s client contracts say about responsibility for vehicle-related accidents?
- Does the current policy address each of these situations directly, or does it only cover the most common one?
Working through these questions with a staffing client leads to a more informed staffing agency insurance recommendation. It reduces the chance that a driving exposure gets missed until a claim exposes it. Get in touch with us to talk through non-owned automobile insurance options for your staffing clients.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and are committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.