Sports Insurance Blog » hired auto liability

Sports organizations need Non Owned and Hired Auto Liability to cover their liability arising out of the use of vehicles that are not titled to the sports organization.

A non owned auto is an auto that is not owned by the sports organization but is instead owned by an employee or volunteer who runs errands or transports participants at the direction of an authorized league official. Sports organizations benefit from the use of the non owned vehicles.

When these vehicles are involved in an accident where the passengers or other third parties are injured, the sports organization may be vicariously liable and can be shotgunned into these lawsuits as a deep pocket. Injured parties often seek out the sports organization as a deep pocket when the owner of the non owned vehicle is uninsured or underinsured for personal auto insurance.

Non owned Auto Liability covers the sports organization itself but does not normally cover the individual vehicle owner or driver. Individual vehicle owners or drivers must look towards their own Personal Auto Policy for coverage.

A hired auto is an auto that is borrowed (ex: church or school) or that is leased from a rental car company. Hired Auto Liability protects both the sports organization and driver from liability arising from an auto accident when a vehicle is borrowed or leased.

Non Owned and Hired Auto Liability can be obtained on either a Business Auto policy or a General Liability policy. However, the insurance carriers are reluctant to write these coverages for sports organizations due to the high severity potential and the fact that sports organizations typically don’t implement loss control protections. Basic loss control protections include driver screening by receiving acceptable Motor Vehicle Reports (MVRs) and by requiring employees to provide evidence that they carry a Personal Auto Policy with limits of at least $300,000 combined single limits.

In addition, many insurance carriers are reluctant to extend these coverages to the rental of 15 passenger vans due to their documented tip over propensity or for the transportation of participants. The actual policy language must be carefully reviewed for these restrictions.

It is important to note that Hired Auto Liability does not provide any coverage for damage to the rental vehicle itself. Another blog will address this topic.

Source: John Sadler

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