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more on employer liability for employee vehicles and finding auto insurance July 24, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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more on employer liability for employee vehicles and finding auto insurance
July 24,  2017
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more on auto insurance covering employees
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Ken,
    In regards to the question on current auto carriers and the overall auto insurance market.  Auto claims has been the loss leader for majority of insurance carriers, in talking with underwriters and carrier reps over the last few years just about all of them are taking similar stances.  In the current marketplace, it is very hard to find a carrier to write just a mono-line auto policy as the overall loss history for that line of business has been awful across the industry.  Carriers will want to include the auto coverage with the other lines of business (Property, Liability, Umbrella, etc.) otherwise will most likely take a pass due to the new underwriting guidelines.  I know it is not the answer that you want to hear but it will be tough to keep the E & O and other coverage's with current carrier and find a carrier just for the auto coverage, if you can find carrier they will be more expensive only writing the auto coverage.
    In conversations with carriers the biggest issue with current Auto Insurance Marketplace is as follows:
1)      More Injuries and fatalities – fatalities increased by 6% last year and cost of accidents increased by 12% (washingtonpost.com)
2)      More Distracted Drivers
3)      More Cars on roads – record # of vehicles sold last years
4)      More Social – 74% of drivers used social media while driving (ncs.org)
5)      More Affordable Gas Price
    Thanks
Jeff Schulz
J.Krug & Associates, Inc.
Relax. You're Covered.
Insurance, Risk Management, Financial Services                            
1350 West Northwest Highway                            
Mount Prospect, IL 60056
Direct (847) 818-7508
www.jkrug.com
jschulz@jkrug.com
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Ken
    Your readers pose great questions relating to insurance.  We have the answers.
    Employer liability for employee’s use of personal auto: 
    The hired and non-owned portion of the commercial auto policy (symbols 8 & 9) are often misunderstood.  The non-owned section covers the company (alarm dealer) in the event of a law suit when an employee is driving their personal auto.  This coverage is secondary to the employee’s personal auto policy.  The employee is expected to have insurance coverage first, then the non-owned portion of the commercial auto policy will protect the company against law suit.  The “hired” portion of the policy will protect the company when a rental or “hired” vehicle is needed.  Many times companies rent vehicles for their employees to drive while traveling or near corporate office.  This coveage is liability only as well.  However, commercial auto policies can be endorsed to cover “hired vehicle physical damage” coverage.  This will offer physical damage (comp and collision coverage) for the hired vehicle.  If the company rents vehicles often, this will be a good idea, as the dealer will no longer have to purchase the expensive rental car agency’s insurance policy.  The only gap hired vehicle physical damage has for rental car coverage is the loss of use while the damaged rental car is not able to be rented.  Typically this is a small dollar figure and most are willing to self insure for this amount.  If you are not willing to take upon this risk, then you should purchase the rental car insurance from the rental car agency. 
    Insurance companies do NOT offer non-owned vehicle phsyical damage for the employee’s car.  It is NOT the responsibility of the dealer.  It is the responsibility of the employee to have that type of coverage. 
    There are many insurance carriers that will offer stand alone commercial auto coverage for commercial autos.  If your current agent lost his/her appointment with your current carrier, you can call the carrier and find another broker that can assist you.  You do not have to, nor should you package the commercial auto with an insurance carrier that offers E&O for alarm dealers.  The E&O (professional) liability is a specialized coverage and that same carrier will not specialize in commercial auto (SARRG is a perfect example – doing great with General and Professional liability, but not well with commercial auto).  Look for regional and super regional carriers in your region to take care of you for you commercial auto needs.      Depending upon which region of the country you live, will determine which carriers will write this business.  Very rarely will we write the commercial auto with the same carrier as the General and Professional (E&O) liability.  It doesn’t make sense to package.  Packaging policies with the same agency does make sense, but let the broker take care of you. 
    Many brokers write with SARRG.  You do NOT have to go direct to them.  The premium is the same whether you go direct or with a broker.  If you go with a broker, then that broker can help you with your other insurance needs such as:  commercial auto, EPLI, Work Comp, bonding, Cyber, etc. 
Shawn Iverson, CIC
The Insurance Center
Ogden, UT 84401
801-622-2626
877-422-2626
www.AlarmInsuranceCenter.com
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Ken
    Here in California liability for the operation of a motor vehicle first falls on the registered owner, regardless of who’s driving or what its being used for.  Similarly, responsibility for damage TO that vehicle should of course fall on the party that caused that damage, which normally isn’t the vehicle-owner’s employer (unless the boss runs into the employee’s car… which has happened…). 
    The only thing we see that modifies that rule of thumb is when the employer makes a formal arrangement with the employee wherein the employer agrees to be responsible for [a portion of] damages occurring to the employee’s car while employee is using it for designated company business.  This type of arrangement is rare and usually to accommodate an unusual circumstance, so coverage for it isn’t common, though theoretically you could get it endorsed onto the employer’s Auto policy under “Hired & Non-Owned Auto Physical Damage” (same thing used to cover damage that occurs to a car you rent if you forgo the rental company’s Damage Waiver), but only if the employer was viewed to be contractually liable.
    If there’s some really good reason the employer feels they need to be responsible for the employee’s vehicle damage, they could just consider comping part of the deductible on the employee’s own auto insurance, then it’s a small-dollar expense reimbursement rather than trying to orchestrate separate insurance to address something not normally covered by the employer.  But formalizing anything like that should be ran through the attorney that helped with their employment contracts since these things wind up being interconnected.
Larry St John, CIC
Eclipse Marketing & Insurance Services
lstjohn@eclipseinsurance.com
707.469.6776 x102 
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Ken
    To Joel Kent and others in Connecticut having trouble finding auto insurance.
We get commercial auto, single vehicle coverage in Ct. using Progressive. The rates were much lower than our previous commercial auto provider.  You can call our agent, Neil at Amityville insurance  work 203-230-8810.
Randy Stone
Estate Watch LLC.
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Response
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    Though you may find better success bundling your insurance needs be carefull selecting your general liability with alarm industry errors and omissions coverage.  You are better off sticking with carriers that have Alarm Programs.  See the list of insurance brokers on The Alarm Exchange - they know the alarm industry.  You can use any broker for the auto insurance.  Just be sure to explain that you need coverage for your employees using their cars on your time and in furtherance of their work duties.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com