Owned Vehicles: The Business Auto Policy

If the agency owns or leases vehicles, it needs a commercial auto policy. That part is straightforward. The decisions inside it are where programs get into trouble. Limits are the first. Social service transportation puts multiple passengers in a vehicle, which means one accident can produce several bodily injury claims against a single occurrence limit. Agencies frequently carry a limit that would be reasonable for a contractor's pickup truck and inadequate for a twelve passenger van carrying nine program participants. Most agencies in this space should be looking at a commercial auto limit paired with an umbrella or excess layer, and should understand whether the umbrella actually sits over auto. Physical damage is the second. A program van out of service is a program disruption, not just a repair bill. Confirm you have rental reimbursement or a plan for a replacement vehicle, and confirm the valuation basis on older vans. Third, know your driver list and how the policy treats it. Some policies cover any driver with permission; some restrict coverage to scheduled or listed drivers. Agencies with staff turnover need to know which kind they have.

• Set limits with multiple passenger injuries in a single accident in mind, not a single claimant
• Confirm whether the umbrella or excess policy sits over the auto policy
• Review physical damage valuation and how a vehicle out of service affects the program
• Determine whether the policy covers permissive drivers or only listed drivers
• Check whether passenger seatbelt, child restraint, or wheelchair securement requirements appear as policy conditions

Staff Who Drive Their Own Cars

This is the most common exposure and the least understood. When a case manager uses their own car to take a client to an appointment, two policies are in the picture and both have limitations. The employee's personal auto policy is primary for their own vehicle. Personal auto policies, however, commonly contain a public or livery conveyance exclusion and in some forms broader business use restrictions. Whether a given program trip triggers that exclusion depends on the policy wording and the facts, including whether the employee is compensated for transportation specifically. Agencies should not assume staff personal policies will respond, and should not assume they will not. They should read them, or at least require evidence of coverage and ask the question. The agency's exposure runs through hired and non owned auto liability, usually added to the commercial auto policy or available on a general liability policy in limited form. Hired and non owned auto covers the agency's liability arising out of vehicles it does not own, including employee vehicles used in agency business. It does not repair the employee's car and does not pay the employee's own liability beyond the agency's involvement. So the structure that works is this: the agency carries hired and non owned auto liability for its own exposure, and it sets a policy requiring staff who drive clients to carry and document personal auto limits at a stated minimum.

• Hired and non owned auto liability protects the agency, not the employee's vehicle
• Require written evidence of personal auto coverage at a stated minimum limit from any staff member who transports clients
• Verify those limits on a schedule, not once at hire
• Reimburse mileage rather than paying a transportation fee where possible, and discuss the wording with your broker
• Document which positions are authorized to transport clients and which are not

Volunteer Drivers

Volunteer drivers carry all of the staff issues plus a few of their own. The volunteer's personal auto policy is still primary for their vehicle, and the agency's hired and non owned coverage still responds to the agency's liability. What changes is control. Volunteers are screened less rigorously, trained less thoroughly, supervised less closely, and are more likely to be older or to drive older vehicles. Programs that use volunteer drivers should screen them like drivers, not like volunteers. That means a motor vehicle record check at intake and on a schedule, verification of a valid license and current personal auto coverage at a stated minimum, a written agreement describing what the volunteer may and may not do, and the same background screening used for any volunteer with direct client access. Then there is the question nobody asks until later: does your general liability or professional liability policy treat volunteers as insureds. Many forms do, some do not, and some do only while acting within the scope of their duties. If a volunteer is named in a lawsuit alongside your agency, that answer matters.

• Screen volunteer drivers with motor vehicle record checks, license verification, and proof of personal auto limits
• Use a written volunteer driver agreement that defines authorized trips and prohibited activity
• Confirm whether volunteers are insureds under your general liability and professional liability policies
• Set and enforce a rule about transporting clients alone, which is both a safety and an allegation management issue

Where Auto Coverage Ends and Professional Liability Begins

A transportation claim in a social service setting rarely stays a transportation claim. Consider a van accident in which a participant is injured. The auto policy addresses the collision. But the complaint may also allege inadequate supervision during transport, failure to properly secure a wheelchair, improper staffing ratios for the trip, or failure to screen the driver. Those allegations reach into professional liability, abuse and molestation coverage, and in some cases directors and officers coverage. The practical risk is a coverage gap between policies written by different carriers with different definitions. The auto carrier may say the claim is about program supervision. The professional liability carrier may say it arises out of the use of an auto, which is typically excluded. Agencies that transport clients should have both policies reviewed together, specifically for how each treats bodily injury arising from transportation.

• Allegations of inadequate supervision during transport may fall outside auto coverage
• Professional liability policies commonly exclude claims arising out of the use of an auto
• Abuse and molestation allegations involving transportation need to be mapped across both policies
• One on one transportation of a client is a high allegation risk activity and deserves a written protocol

Review Your Program Transportation Exposure

If your programs move clients, the auto, liability, professional, and abuse policies should be read as one program rather than four separate purchases. We work with group homes, foster care agencies, youth programs, adult day programs, and behavioral health providers, and we are glad to review your current coverage and your driver policy together. Schedule a time at calendly.com/grandbayfinancial. This article is for general information and is not a substitute for policy language or professional advice.