Risk Management

Our Money? Why It's Not Our Car!? The driver's policy should pay.

That is the surprised retirement home administrator questioning The Hartford Claims Department once they have a suit brought against them for injury resulting from one of their volunteer's cars or one of their employee's cars. Many insureds assume the insurance follows the vehicle owner. That is usually true. Unfortunately, employees or volunteers using their own car on retirement home business may carry no insurance or more often have low limits.

Your policy, in most cases, will respond on an excess basis over the nonowned auto driver's policy. Bodily injury claims following auto accidents can easily reach several hundred thousand to a million dollars. Do you carry $1 mill limits on your personal auto policy? Few people do including your drivers. As a result, an $800,000 claim against the employee names the home as a codefendant and your experience is made worse by a $700,000 contribution to the claim in excess of the employee's personal policy, assuming he has $100,000 limits.

More than the shared loss dollars, your home's reputation suffers when people are hurt due to accidents involving vehicles you do not own. How can you protect yourself? Here are three simple measures.

1. Initial plus Annual MVR Checks:

Apply the same MVR controls you use with your owned vehicle drivers to those volunteers and employees who regularly transport residents or run business errands in their own cars. You have a right and a duty to know the driving record of those involved in your business. One retirement community suffered severe public relations damage when the local paper reported a fatal accident . The driver had been on a suspended license for driving under the influence. Three residents were killed in the crash.

2. Verify Personal Auto Insurance

Verify by collecting certificates of insurance that your drivers , both employees and volunteers, carry their own personal auto insurance with at least $100,000 limits, preferably $300,000. Your policy will be excess of theirs. If they do not have insurance it's probably due to a poor record. Do you want to be primary? They may not have insurance because their driving record is very poor.

Visiting nurses ,as a group, are frequently on the road. If they carry no personal insurance and injure someone they will need coverage. It is hard to prove they were not somehow involved in your business when an accident involving others happens.

3. Driver Training

Make defensive driver training courses available to all your employees. They will appreciate it and it may save you the embarrassment of a large claim or the loss of a key employee. With a sufficient number of attendees, The Hartford will offer this course free of charge to AAHSA insureds.