By Dentistry Insured by Emery & Webb, Inc.
Your office manager drives to the bank to make a deposit. A dental assistant picks up supplies on the way back from lunch. An employee uses their own car to deliver paperwork to another office.
These may seem like routine errands, but they raise an important insurance question:
What happens if an employee gets into an accident while using their personal vehicle for dental practice business?
Many dental practice owners assume the employee's personal auto insurance will take care of everything. While the employee's policy may provide primary coverage in many situations, a serious accident could potentially create liability for the dental practice as well.
That's where hired and non-owned auto (HNOA) liability insurance may become important.
Can a Dental Practice Be Liable for an Accident in an Employee's Personal Car?
Potentially, yes.
When an employee is driving as part of their job duties or performing an errand on behalf of the practice, an accident may expose the employer to liability depending on the circumstances and applicable law.
Consider this example:
Your office manager uses her personal vehicle to make a bank deposit for the practice. On the way, she's involved in an accident that seriously injures another driver.
Her personal auto insurance may respond first. But what happens if the injured party alleges that the employee was acting within the scope of her employment and also pursues the dental practice?
Or what if the damages exceed the limits available under the employee's personal auto policy?
Your standard business insurance may not automatically provide the protection you expect.
What Is Non-Owned Auto Liability Insurance?
Non-owned auto liability coverage is designed to help protect a business when employees use vehicles the business does not own for business purposes.
For dental practices, that could include an employee's personal car used to:
- Pick up dental or office supplies
- Make bank deposits
- Visit another practice location
- Attend a business meeting
- Travel to a continuing education event on behalf of the practice
- Deliver documents or equipment
- Perform other practice-related errands
The key distinction is that the vehicle isn't owned by the dental practice.
Non-owned auto liability generally protects the business's liability exposure arising from the use of these vehicles, subject to the specific policy's terms, conditions, exclusions, and limits.
It is not a replacement for the employee's personal auto insurance.
Doesn't the Employee's Personal Auto Insurance Cover the Accident?
The employee's personal auto policy will often be an important source of coverage, but practice owners shouldn't assume that means their business has no exposure.
Personal auto policies are written primarily for personal vehicle use. Coverage can vary when a vehicle is being used for business purposes, and exclusions or limitations may apply depending on the policy and circumstances.
More importantly, an employee's personal policy protects the employee according to its terms. It doesn't necessarily provide sufficient protection for the dental practice if the practice is also named in a lawsuit.
That's why dentists should consider the question from two perspectives:
Is the employee adequately insured?
And:
Is the dental practice protected if it is held responsible for the accident?
Those are not necessarily the same question.
What Is Hired and Non-Owned Auto Insurance?
You'll often hear non-owned auto coverage discussed as part of Hired and Non-Owned Auto Insurance, commonly abbreviated HNOA.
The two portions address different situations.
Non-Owned Auto
This generally applies when vehicles your practice doesn't own are used for practice business, such as an employee's personal car.
Hired Auto
This generally applies to vehicles the business rents, hires, leases, or borrows under circumstances defined by the policy.
For example, if your dental practice rents a vehicle for a business event, conference, or temporary business need, hired auto coverage may become relevant.
Together, these protections can address an exposure many small businesses don't realize they have.
Does a Business Owner's Policy Cover Employees Driving Their Own Cars?
Don't assume that it does.
A Business Owner's Policy (BOP) typically combines important property and general liability protections, but automobile liability is a separate exposure.
Depending on your insurance program, hired and non-owned auto coverage may be available by endorsement or through another commercial policy.
If employees routinely drive their personal vehicles for practice-related business, this is a specific question worth asking during your insurance review:
"Does my dental practice have hired and non-owned auto liability coverage?"
If the answer isn't clear, it's worth finding out before an accident occurs.
When Does Personal Driving Become "Business Use"?
Not every trip an employee takes is automatically considered business activity.
An employee's ordinary commute to and from work, for example, is generally different from an employee who is specifically asked to leave the office and perform a task for the practice.
Situations become more complicated when employees combine personal and business activities.
Imagine an employee leaves for lunch and, at your request, stops at a dental supplier to pick up materials before returning to the office.
If an accident occurs during that trip, questions may arise about whether the employee was acting within the scope of employment.
These situations can be fact-specific, which is another reason dental practices should establish clear policies about employee driving.
What If Employees Regularly Travel Between Dental Office Locations?
Multi-location practices should pay particular attention to this exposure.
If hygienists, dentists, assistants, managers, or other employees routinely use personal vehicles to travel between offices during the workday, the practice may have substantially more non-owned auto exposure than an owner realizes.
The same applies when employees regularly:
- Visit laboratories
- Pick up supplies
- Travel to satellite offices
- Attend off-site meetings
- Transport practice materials
What looks like occasional personal driving can become a recurring business exposure.
Your insurance program should reflect how your practice actually operates.
What Should Dental Practices Do Before Employees Drive for Business?
Insurance is only part of good risk management.
If employees use personal vehicles for practice business, consider establishing a written driving policy.
Depending on your practice and applicable employment laws, your risk management procedures may include:
Verify Driver's Licenses
Employees authorized to drive on behalf of the practice should have a valid driver's license appropriate for the vehicle being operated.
Require Personal Auto Insurance
Consider requiring employees who use their own vehicles for practice business to maintain personal automobile insurance with appropriate limits.
Request Proof of Insurance
Don't simply assume an employee has active coverage. Establish a process for verifying coverage periodically where legally appropriate.
Define Who Is Authorized to Drive
Not every employee necessarily needs permission to perform driving-related tasks.
Establish Safe-Driving Rules
Employees should understand expectations regarding distracted driving, mobile phone use, seat belts, and compliance with traffic laws.
Document Business Driving
Practices with frequent employee travel may benefit from keeping appropriate mileage or travel records.
Review Driving Exposure When Hiring
If regular driving is an essential job function, address it as part of your hiring and risk management procedures.
What Happens If an Employee Has an Accident While Running an Errand?
The first priority is always health and safety. Employees should contact emergency services when necessary and follow applicable reporting requirements.
From a business and insurance perspective, the practice should also promptly document the incident and notify its insurance professional or carrier when appropriate.
Useful information may include:
- Date, time, and location of the accident
- Purpose of the trip
- Who authorized the business errand
- Vehicles and individuals involved
- Police or accident report information
- Employee insurance information
- Witness information
- Photographs or other available documentation
Avoid making assumptions about responsibility or promising that a particular policy will cover the accident. Coverage determinations should be made by the appropriate insurer based on the facts and policy language.
How Much Non-Owned Auto Liability Coverage Does a Dental Practice Need?
There isn't one appropriate limit for every dental practice.
Coverage needs may depend on factors including:
- How frequently employees drive for business
- Number of employees
- Number of practice locations
- Types of business travel
- Existing liability limits
- Practice assets
- Contractual requirements
- Whether the practice also maintains commercial umbrella coverage
A practice with one employee making an occasional bank deposit has a different exposure from a multi-location dental group whose employees drive between offices every day.
The goal is to evaluate the actual risk rather than simply adding coverage because it appears on an insurance checklist.
Don't Overlook Umbrella Liability Coverage
An automobile accident can produce substantial liability, particularly when severe bodily injury is involved.
Dental practice owners should therefore consider their hired and non-owned auto exposure as part of their broader liability strategy.
Depending on the policies involved, commercial umbrella insurance may provide additional liability limits above certain underlying policies.
It's important to verify which underlying coverages qualify and how the umbrella responds rather than assuming every liability exposure is automatically included.
A Small Errand Can Create a Significant Business Risk
As a dental practice owner, you probably spend considerable time thinking about professional liability, workers' compensation, cyber insurance, and protecting expensive dental equipment.
An employee driving five minutes to the bank may not feel like an insurance concern.
Until there's an accident.
That's what makes hired and non-owned auto liability an important coverage to discuss. It addresses an everyday business activity that can create an unexpectedly large financial exposure.
Does Your Dental Practice Have the Right Coverage?
If employees ever use their personal vehicles for practice-related errands, travel between locations, or other business activities, now is the time to review your insurance.
At Dentistry Insured by Emery & Webb, Inc., we understand that protecting a dental practice requires looking beyond the obvious risks. We help dental practice owners, dentists, and office managers evaluate their operations, identify potential coverage gaps, and build insurance programs appropriate for the way their practices actually operate.
Not sure whether your dental practice has hired and non-owned auto coverage?
Call Dentistry Insured at (866) 279-1252 to discuss your current insurance program and determine whether your practice may have an uncovered auto liability exposure.