Episode 12: Do I Need Non-Owned Car Insurance Coverage In My Small Business?

Picture this: you're cruising down the road, your pet by your side when suddenly, disaster strikes. A careless driver swerves into your path putting your client's pet in harm's way. Are you prepared for the unexpected? Are you equipped with the ultimate shield to protect yourself and your clients? Have you considered Insurance liability? As a pet business owner you know the business requires a high level of responsibility and trust. Have you considered the importance of having the right insurance coverage? Or considered Insurance liability? In this episode of "Bella in Your Business: Pet Industry Business Podcast," we are thrilled to welcome back  David Pearsall, Vice President at Business Insurers of the Carolinas. In this episode, he is talking about liability insurance options for pet-sitting businesses.  We dive into some important topics like non-owned auto insurance, umbrella policies, and business owner policies. It's crucial to understand the coverage provided by each policy and determine if additional coverage is needed based on your specific business circumstances. Topics Discussed The basics of non-owned auto insurance The importance of non-owned insurance The misunderstood umbrella policies The different insurance options for pet sitters The importance of understanding different liability Insurance policies Advice on handling insurance claims and available discounts. The importance of communicating with an insurance agent to determine the best coverage options for individual businesses. Timestamps [01:13] The basics of non-owned auto insurance [04:02] Liability for accidents involving pet sitters [07:33] Options for purchasing non-owned auto coverage [08:44] The umbrella policy [09:07] Differentiating umbrella and underlying policies [11:34] Special event policies [17:54] The importance of pet taxi [18:30] Different insurance coverage options [20:14] Comparison of insurance products [25:53] Business owners' policies and liability insurance [26:48] Calling your insurance agent [28:48] Need for non-owned auto liability coverage [34:03] Why it's important not to admit liability at the time of a claim [34:49] Discounts on additional policies [35:43] Broadest liability form for pet services professionals Notable Quotes [00:01:09] “Usually  non-owned car insurance coverage is a specialty endorsement, either to a business owner policy or a commercial auto policy.” [00:01:21] “Non-own auto insurance covers basically any vehicle that's owned by your employees or by other people that it's not owned by you, but they're using it in the course of your business.” [00:05:48] “You really should have a commercial auto policy as opposed to a personal auto policy, because a personal auto policy's designed for you. Personal is not really designed to pick up.” [00:07:03] “Even if they don't have the sticker on their car If they're using it in their business, it's not going to get covered into the personal auto policy. “ [00:07:57] “Umbrella policy is the policy that goes over your commercial auto policy, your general liability, and your worker's comp.”  [00:09:08] “I do believe that there is some misinformation going on with the umbrellas. And the umbrellas are broader than the underlying policies. “ [00:20:20] “You can buy different policies that will cover a pet sitter for liability. But the primary differences are the kind of claims you want to be paid.”  [00:25:57] “If you have employees, you know, you may want to consider employment practices, liability insurance. If you have a computer and you're accepting money online or you're keeping a database with your clients’ information, you may need cyber liability.”  [00:29:24] “If you've got ten or 15 employees working for you and they're on the street all the time, then you certainly have a much larger exposure.”  [00:32:03] “If someone hits you back to your car, their liability will be responsible If they don't have coverage. There's another auto coverage called uninsured motorist or underinsured motorist.” Resources Podcast: Bella in Your Business: Pet Industry Business Podcast Join Mastermind Email Bella: [email protected] Sign up for a 20 mins call  Better Marketing with Bella Connect with David  LinkedIn Connect with Bella Website Facebook YouTube Did you love this episode? If you liked this episode, please head on over to iTunes and leave a five-star rating and review. Every single review helps get this community bigger, stronger, and better. It gets other jumpers just like you into the community. Always remember when life gets down, always keep jumping. Transcript: Welcome to Bella in Your Business, where Bella will discuss anything and everything about your pet sitting business to help you land on target. So get ready, Bella's got your shoot. Let's jump. Good morning, everybody. This is Bella Vasta with Jump Consulting, and I am joined here live today with the wonderful, the honorable, the knowledgeable David Purcell from Business Insurance of the Carolinas. David, thanks for being here with us today. David: Thanks for having me, Bella. Appreciate that. Bella: For sure. You're definitely the go-to expert when it comes to everything insurance and online. We're always abuzz about many different insurance topics. The hot topic, as you know, this week is all about car insurance and this thing called non-owned. So basically, David, we've got a couple of questions for you today, but I just kind of wanted to crank out this whole subject area because it's kind of confusing. Let's start off with just a typical example. So I'm a pet sitting business owner and I have employees driving around doing pet sits. They get in an accident. What happens? Take it away. David: Great question. Usually, non-owned auto insurance is a specialty endorsement either to a business owner's policy or commercial auto policy. It’s important to define exactly what it covers and what it is. Non-owned auto insurance covers any vehicle that's owned by your employees or by other people that's not owned by you, but they're using it in the course of your business. So what that means—if I were to send the receptionist to go pick up the mail at my office and she drives her own personal vehicle and she were to get in an accident, and during the course of that accident they learned that she was on business use—then if I was sued, the business was sued, my insurance would be excess over her personal auto policy. It's an excess coverage. Insurance typically follows the vehicle in most states. So if you're driving your car and you hit somebody, your liability insurance is going to be primary. Typically, what happens if a pet sitter were driving in the course of business, performing their duties from one pet sitting job to the next, or transporting pets in their car for pet taxi purposes, and they were in an auto accident and hurt somebody or caused property damage, the person could be sued and their personal auto insurance would apply. However, if they find out that the business was involved and the person was working for you at the time, they could also sue your business. What's hard for this coverage is that a lot of pet sitters use independent contractors, and when you read the forms, just like the liability insurance, they don't define independent contractors under the commercial general liability policy or a hired or non-owned policy. So they're really talking about employees and not independent contractors. There would be some situations where independent contractors may have some coverage, but it’s all going to be defined by an attorney at the time of the claim. If they're true independent contractors, they really need their own insurance. Bella: I am very heavy on employees. Let’s have this conversation function around employees, and I appreciate you making that differentiation because it is very important for people to understand these two very separate conversations. So for the sake of this discussion, we’ll talk employees. So pet sitters going to a pet sit, doing pet taxis for the pets, get in an accident—and it was their fault—the sitter would be the one sued, or their insurance would be the first to cover it. Then if they had maybe really low limits, the business’s non-owned insurance would kick in if you had it. If you didn’t have it, what could happen? David: What could happen is you could be forced to defend yourself in the claim. If that person could prove that the pet sitter was working on behalf of your business when the accident happened, then you would have to defend yourself and pay for an attorney. If they deem that you were responsible for that pet sitter being on the road, you could be held liable for those injuries. Bella: Now how much does that non-owned go up to? I’m sure there’s a cap, right? David: Yes, typically about a million dollars. There are two ways to purchase non-owned auto coverage: one, through a commercial auto policy, which is recommended if you have decals or your car branded for business; and two, through a business owner’s policy. Commercial auto policies are for vehicles used primarily for business. If you’re using your car routinely for pet sitting, you should have a commercial auto policy because personal auto insurance isn’t designed for business use. Bella: So if a pet sitter has a decal or magnet, they’ve automatically made their car a commercial auto, right? David: Even if they don’t have the sticker, if they’re using it for business, they should still have a commercial auto policy. Bella: So it’s best for pet sitters to have non-owned car insurance coverage, especially if they have employees. David: Exactly. And you can get that either through a commercial auto policy or a business owner’s policy.