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Why Your Church or Non-Profit Needs Hired & Non-Owned Liability

By February 19, 2024March 21st, 2024Auto/Transportation

Hired & non-owned auto coverage applies to vehicles you rent and/or to vehicles that are not owned by you but are used for your organization’s purposes.  Using rented (“hired”) or personal (“non-owned”) vehicles for church-related purposes can expose your church to risks you may not know you had. Here’s some typical scenarios.

  • An employee uses their own vehicle to go to the bank, office supply store, or other errands.
  • An employee uses their own vehicle to go to an organizational meeting on your behalf.
  • A volunteer drives their own vehicle to help transport teens to youth or children’s camp or other events.
  • A youth pastor rents a vehicle for summer activities.

On these scenarios, it may be less obvious your church’s exposure because these are not vehicles owned by the church.  However, it is a very real exposure. If in these examples or others, the non-owned vehicle is involved in an “at-fault” accident, your organization could be named in a lawsuit, along with the vehicle’s owner and driver. If the driver/owner are held responsible, then their own auto insurance will pay for injuries to other people and damage to other people’s property.  However, if the claims are more than the liability coverage limits the individual has on their personal auto policy, then your non-owned auto insurance could kick in to pay the remainder of the claim.  Without this valuable non-owned auto liability coverage, you would be left to defend and/or pay for damages on your own. 

In the case of a rented vehicle, the liability under this coverage can extend to the rental vehicle or you can elect to purchase the coverage the rental agency offers. Always keep in mind, if a rented vehicle that you are driving on behalf of the church is in a car accident, you could be held vicariously liable if a lawsuit or claim is filed against the church.

Auto claims are by far the most frequent type of claim and auto claims involving injury can be quite large.  All nonprofit organizations have some type of driving associated with their mission and general operations. If an organization is deemed in any way responsible for an auto accident, even a small claim can quickly eat up the organization’s reserves. A small expenditure for the coverage more than compensates for the potential risks so make sure that you include non-owned auto insurance as part of your nonprofit insurance program.