Do Home Health Agencies Need Commercial Auto Insurance?

The short answer: Yes, even if you don't own any vehicles. This is one of the most commonly missed gaps in the industry. When employees drive their own cars for work, like traveling between client homes, your agency has hired and non-owned auto exposure. If an employee causes an accident while working, their personal policy may not fully cover a claim tied to business use, and your agency can be pulled in. Hired and non-owned auto coverage is usually an affordable add-on.

Many healthcare agencies assume they don't need auto insurance because they don't own any vehicles. But if employees drive their own cars to see clients, run errands for the business or transport clients, your agency has auto liability exposure.

How a claim reaches your agency

Picture a caregiver driving between two clients who runs a stop sign and seriously injures another driver. The caregiver's personal auto policy pays first, up to its limit. Personal limits are often low, sometimes just the state minimum. Once those are exhausted, the injured party's attorney will look for other parties to pay, and the employer whose business the caregiver was conducting is the obvious one.

Some personal auto policies also exclude or limit business use. In that case the agency can become the primary target.

Hired & non-owned auto (HNOA)

HNOA liability protects your agency when:

• Non-owned: employees use their own vehicles for your business
• Hired: you rent, lease short-term or borrow vehicles

It's liability coverage for the agency. It doesn't repair the employee's car or cover their injuries (that's workers' comp). It's typically added to a general liability or package policy and is inexpensive relative to the protection it provides.

When you need a commercial auto policy

You need commercial auto coverage if your organization owns or leases vehicles, for example a van for client transportation or company cars for clinicians. Commercial auto provides liability, physical damage, uninsured motorist and medical payments coverage for scheduled vehicles.

Transporting clients

Driving clients to appointments, errands or day programs is a significant exposure. Carriers want to know:

• How often clients are transported and in whose vehicles
• Whether drivers are screened (MVRs), trained and limited by age/experience
• Whether you charge for transportation or bill it to a payer

Undisclosed client transportation is a common source of coverage disputes, so make sure it's on the application.

Best practices that lower risk (and premium)

1. Run MVRs at hire and annually for anyone who drives for work.
2. Require minimum personal auto limits (for example $100,000/$300,000) and collect proof each year.
3. Adopt a written driving policy covering phone use, client transport and accident reporting.
4. Add umbrella coverage above your auto liability if you have many drivers or long distances.

Quick checklist

• Do employees drive for work? → You need HNOA.
• Do you own or lease vehicles? → You need commercial auto.
• Do you transport clients? → Disclose it and confirm coverage.
• Do contracts require auto limits? → Check whether HNOA satisfies them.

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