Many organizations have volunteers or staff that will occasionally use their personal vehicles on behalf of the organization. Some examples include a board member travelling to a meeting, a group of employees carpooling to a conference in a one of the individual’s vehicles, or even a staff member driving to pick up doughnuts for everyone before a staff meeting.
If an employee uses their personal vehicle on behalf of your organization, however, it is their personal insurance that will pay for any claims; there is no top-up available from your organization’s policy. Although your organization may get sued along with the employee in the event of severe injuries from an accident, your organization’s insurance would only defend your organization, not the individual employee; the employee would need to rely on their personal insurer for defence.
Organizations insured through RMA Insurance carry non-owned automobile coverage with a $5 million limit that will defend them if they are named in a lawsuit. The volunteer or employee’s own insurer would defend and payout on their behalf.
For these reasons, we recommend the following:
A very clear policy in place as to when and who can use personal vehicles on behalf of your organization, including who will authorize this use.
A way of recording authorization information once it is given.
Proof of registration and insurance for any individual wanting to use their own vehicle, provided by way of a registration certificate and pink card to your organization prior to authorization.
Make the authorized individual’s personal insurer aware that their vehicle may be used on behalf of the organization – insurers not made aware of this have the right to deny the claim, leaving the employee or volunteer to defend themselves. Personal insurers made aware of the use of the vehicle may charge additional premium but cannot deny the claim. Some organizations choose to pay any additional premium on behalf of authorized individuals.
For any questions or more information please contact our risk management team.