Does Your Hired and Non-Owned Auto Insurance Policy Cover the “Any Auto” Requirement from Your Vendors?

Understanding the various insurance requirements that apply to your business is critical, including those related to commercial auto insurance. This is especially true when you don’t own vehicles, but hire them from time to time.

If you work with outside vendors, you need to explore your auto policy to find out if it is sufficient. Many vendors have an “ANY AUTO” requirement in place. This means that you need to have insurance on ANY vehicle that is being used in conjunction with your work with them, whether it is hired, non-owned, or otherwise.

Who Needs This Coverage?

Consider the fact that many small businesses require customers to carry insurance that will cover all of the owned, hired, and even non-owned vehicles. This includes builders, general contractors, trade contractors, landscapers, florists, and other select businesses.

But there’s a problem. If you opt for Hired or Non-Owned auto coverage, you can’t purchase Any Auto coverage. Additionally, you have to understand that Any Auto coverage extends liability coverage only. This means you won’t have the coverage for physical damages, such as comprehensive or collision.

Consider the Timing

Accidents happen all the time. If you are a general contractor and you have a commercial auto insurance policy, you may buy another vehicle prior to your policy being renewed. If you get into an accident and have forgotten to tell your insurance company of this new truck, it can pose a variety of problems—unless you have an Any Auto coverage policy.

Obviously, this could provide you with the protection that you need so you don’t get a claim denied simply because you forgot to think about this one minor detail. This means you have to look at what your options really are.

Explore Liability Deficiencies

What kind of liability deficiencies are currently found in your policies? If you can only get one or the other in terms of policies, then there may be other options available. This is when it can be beneficial to speak with an insurance agent.

You may be able to sign a letter or affidavit on your company’s letterhead. If you don’t own any vehicles and you are submitting only Hired and Non-Owned auto coverage or you want to be exempt from having to maintain automobile liability coverage, this may be an option available to you.

The letter or affidavit would need to identify that you do not own any vehicles. You will also need to indicate that if you acquire a vehicle during the term of your contract, you agree to maintain automobile liability coverage based on the date of the acquisition.

Associate vendors would need to provide a certificate of insurance to show that automobile liability insurance is waived. It also needs to identify that the associate vendor will not hold the contractor or client responsible for damages, losses, or claims that may occur.

There is a significant amount of fine print that is associated with this kind of situation. Unfortunately, not all policies work well together.

When you are looking at Any Auto coverage, you have to explore the various exceptions, restrictions, and deficiencies that exist within the policy. By working closely with an insurance agent, you can ensure that you get the coverage that is needed while overcoming any requirements that are in place from your vendors.

With a little bit of advanced planning and having the foresight to sign an affidavit, you can have the protection that is needed without spending a fortune.

Dan Levenson

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