Its a must for most sports and recreation organizations to carry Non Owned And Hired Auto Liability insurance which can be a stand alone policy or part of the General Liability policy. Very few sports administrators understand the importance of this coverage and what they should be doing to protect their insurance carrier from ever having to pay a claim.

A non owned auto is one that is not owned by the sports or recreation organization, but is instead owned by a staff member (employee or volunteer) or borrowed from an organization such as a church. When these non owned autos are involved in an accident while on association business: the following parties can normally be sued: the owner of the vehicle, the driver, and any organization for whose purpose the errand is being run. In other words, the sports organization can be sued for their vicarious liability of their staff member.

Its important to note that Non Owned Auto Liability insurance does not cover the driver or damage to the vehicle. It only covers the association that is the named insured on the policy. The driver will have to rely on his or her own Personal Auto Insurance Policy to provide liability and physical damage protection.

I just came across some excellent loss control material from Philadelphia Insurance Company on the topic of controlling the Non Owned Auto Liability risk in the sports and recreation context. This exposure represents an infrequent, but high severity risk where damages can easily exceed $1,000,000. The insurance carriers that insure sports and recreation organizations are very concerned about this exposure because its difficult to collect the proper premium for a low frequency – high severity risk. Sports organizations need to take this risk very seriously and implement the recommended controls.

Here are some links that you will want to check out:

Case studies on actual Non Owned Auto Liability losses in the non profit association context where damages exceeded $1,000,000: http://image.exct.net/lib/fecd15717367027c/m/1/InvestigationForm2.24.10.pdf

Personal vehicle usage precautions: http://image.exct.net/lib/fecd15717367027c/m/1/Employee-Volunteer.Use.of.PersonalVehicles2.19.10.pdf

Driver eligibility criteria: http://image.exct.net/lib/fecd15717367027c/m/1/Driver+Eligibilty_4400.pdf

Driver training and motivation: http://image.exct.net/lib/fecd15717367027c/m/1/Driver+Training+and+Motivation_2200.pdf

Source: Philadelphia Insurance Company, Hired And Non Owned Automobiles, Large Loss Lessons Learned