12:48 PM
As a cannabis business owner, you might not realize that if your W-2 employees are using their personal vehicles to make deliveries, your business could be at serious risk without the right insurance coverage. It is essential to consider cannabis auto insurance to protect your business.
Too often, we get calls from delivery drivers asking to buy commercial auto insurance for their personal cars. But here’s the catch: it’s actually the employer’s responsibility to have the right coverage, not the employee’s.
For businesses with delivery drivers using their own cars, the specific insurance policy needed is called Hired and Non-Owned Auto Insurance.
This policy protects your business by covering accidents that happen when employees use personal vehicles for work purposes. It is a crucial aspect of cannabis auto insurance for businesses in this industry.
Why is this important?
Here are a few reasons why this coverage is essential:
- Personal Auto Policies Don’t Cover Work-Related Accidents
If one of your drivers gets into an accident while making a delivery, their personal auto insurance will likely not cover the damages. Since the accident happened on the job, the claim will be denied, and liability could fall back on your business. - Claims Will Default to the Employer’s Insurance
When an employee tries to file a work-related accident under their personal auto policy, that insurer will deny the claim and look to your business to cover it. Without Hired and Non-Owned Auto Insurance, you could be left handling significant expenses out-of-pocket. - Your Business Could Be at Risk of Lawsuits and Financial Loss
In the event of a severe accident, like one causing injury or death, your business could face lawsuits from the victims or their families. Without the right insurance in place, these claims could be devastating financially and may even threaten the future of your business.
Commercial auto insurance is often called the “loss leader” out of all types of commercial insurance policies because the losses can be high and, unfortunately, sometimes fatal. (Typically an unprofitable loss ratio over 100.) This coverage is crucial to protect both your business and your employees—and it’s not something to take lightly.
It’s a simple step that can protect your business from huge potential losses.
If you’re operating a cannabis business with delivery services or other driving exposures including sales, make sure to speak with an insurance professional about how to manage this risk. They can help you understand the importance of having cannabis auto insurance.
Or if you’re ready to protect your cannabis business from auto-related risks, contact us today to add Hired and Non-Owned Auto Insurance to your policy. We can even help educate your company on how to practice proper loss control to avoid losses in the future.
Sources:
Commercial Auto Insurance Profit Struggles Continue
Virtual University | The “Business Use” Exclusion in the Personal Auto Policy
