Commercial Auto and Hired & Non-Owned Auto: The Coverage Gap Florida Janitorial Companies Miss

Your janitorial company owns one van, so you insure the van.

Problem solved, right?

Maybe not.

What about the supervisor who drives a personal SUV between customer locations?
Consider an employee who stops at the supply house on the way to a job.
Then imagine renting a vehicle because the company van is in the shop.

These situations can create auto exposure for your business.

That is why commercial auto insurance for Florida janitorial companies should reflect how people actually drive for the company.

The biggest mistake is only looking at vehicles the business owns.

Your company may also have exposure involving personal vehicles, rental vehicles, borrowed vehicles, and vehicles driven by subcontractors.

The vehicle does not have to belong to your company for an accident to create a problem for your company.

Why Janitorial Companies Have Significant Auto Exposure

Janitorial businesses are mobile.

Employees may travel between several customer locations during one shift.

Those locations could include:

• Office buildings
• Retail facilities
• Medical offices
• Schools
• Restaurants
• Industrial facilities
• Warehouses
• Supply houses

Employees may also transport cleaning supplies and equipment.

For example, a vehicle could contain chemicals, vacuums, floor machines, ladders, pressure washers, or other tools.

Then there are the people.

Supervisors may transport several crew members to a job.

Employees may use personal vehicles to move between customer locations.

Subcontractors may also drive their own vehicles while performing work under your contract.

Every trip creates exposure.

The more miles your company puts on the road, the more opportunities there are for an accident.

What Does Commercial Auto Insurance Cover?

Commercial auto insurance can provide several types of protection.

However, the exact coverage depends on the policy, vehicles, drivers, endorsements, and circumstances of the loss.

Therefore, business owners should understand the basic coverage categories.

Auto Liability

Commercial auto liability may respond when the insured business becomes legally responsible for covered bodily injury or property damage arising from an auto accident.

Imagine one of your employees causes an accident in a company van.

The other driver suffers injuries, and their vehicle is badly damaged.

The resulting claim could involve medical expenses, property damage, lost income, and other damages.

That is where liability limits become extremely important.

Physical Damage

Physical damage coverage addresses covered damage to insured vehicles.

Two common coverages are collision and comprehensive.

Collision generally addresses covered damage caused by a collision.

Comprehensive generally addresses certain non-collision losses, such as theft, vandalism, or weather-related damage.

The important distinction is simple.

Liability coverage addresses certain claims made against your business.

Physical damage coverage addresses covered damage to insured vehicles.

Other Auto Coverages

Depending on the operation and policy, businesses may also need to consider other coverages.

These can include uninsured or underinsured motorist coverage and certain towing or rental-related options.

The appropriate coverage depends on the operation.

Do not simply duplicate whatever you have on your personal auto policy.

A business auto program should reflect how the company actually uses vehicles.

Florida’s Minimum Auto Requirements Are Not a Risk-Management Strategy

Meeting a minimum legal requirement and having enough insurance to protect your business are two different things.

Imagine one of your employees causes a multi-vehicle accident.

Several people suffer serious injuries.

One of the vehicles is a $70,000 SUV.

Another vehicle contains several passengers.

How far will your liability limits go?

That is the question business owners should ask.

The potential severity of an accident does not change because your company is small.

A janitorial business with five employees can cause the same serious auto accident as a company with 500 employees.

Therefore, do not build your insurance program around the smallest amount of coverage you can legally purchase.

Consider what could actually go wrong.

Legal minimum and adequate protection are two different conversations.

What Is Hired and Non-Owned Auto Insurance?

This is where many janitorial companies discover a potential coverage gap.

Hired and non-owned auto coverage is often shortened to HNOA.

The concept addresses auto liability exposures involving certain vehicles the company does not own.

Let’s separate the two parts.

What Is Hired Auto?

Hired auto generally involves qualifying vehicles the business rents, hires, leases, or borrows.

For example, imagine your company van needs major repairs.

You rent a vehicle for a week so your employees can continue servicing customers.

That rental creates an auto exposure.

Another example might involve renting a vehicle while employees travel for company business.

The specific policy terms matter, so do not assume every rented or borrowed vehicle is treated the same way.

What Is Non-Owned Auto?

Non-owned auto exposure often involves vehicles the company does not own but that are used in connection with company business.

The most common example is an employee’s personal vehicle.

Imagine an employee drives their personal car from one customer location to another.

The employee owns the car.

However, they are driving because of your business.

If they cause an accident, your company could potentially become part of the claim or lawsuit.

That is why non-owned auto liability deserves attention.

Hired and non-owned auto coverage answers a business liability question, not simply, “Who owns the car?”

Employees Using Personal Vehicles Can Create a Hidden Exposure

Consider this scenario.

An employee finishes cleaning Customer A.

The supervisor calls and asks the employee to help another crew at Customer B.

The employee gets into a personal vehicle and drives to the second location.

On the way, the employee causes a serious accident.

The injured party may look at more than the employee.

They may also ask:

Was the employee working?

Did the company direct the employee to make the trip?

Were they traveling between customer locations?

Could the employer be legally responsible?

Now the janitorial company’s insurance program becomes important.

The employee’s personal auto insurance and the company’s business liability exposure are separate questions.

A personal auto policy should not automatically be viewed as the complete solution to the company’s exposure.

That is why janitorial companies that allow employees to use personal vehicles for business should review non-owned auto liability with their insurance professional.

Mileage Reimbursement Does Not Eliminate the Exposure

Some companies reimburse employees when they use personal vehicles.

That is a business decision.

However, paying mileage does not automatically eliminate the company’s potential liability exposure.

The employee may still be driving on company business.

For example, the employee could be:

• Traveling between customers
• Picking up supplies
• Making a bank deposit
• Delivering paperwork
• Attending a meeting
• Running another company errand

If you reimburse employees for driving, ask another question.

What standards must they meet before they drive for the company?

That leads directly into driver qualification.

Personal Auto Insurance Should Be Part of Your Driver Policy

If employees regularly use personal vehicles for company business, create a formal process.

Do not simply tell employees:

“Make sure you have insurance.”

Document your requirements.

Depending on the operation and advice from your insurance professional, the process may include:

• Valid driver’s license
• Proof of personal auto insurance
• Established minimum insurance requirements
• Current vehicle registration
• Motor vehicle record review
• Annual reverification
• Employee reporting requirements

Employees should also be required to notify the company if their license is suspended or their insurance changes.

However, remember one important point.

Collecting an employee’s insurance card does not transfer all the company’s risk to that employee.

Verification is a risk-management control. It is not a substitute for the company’s own insurance.

What About Employees Picking Up Supplies?

Some of the most overlooked business-driving exposures involve simple errands.

Imagine an employee is heading home.

A supervisor sends a text:

“Can you stop at the supply house and pick up two cases of cleaner?”

The employee agrees.

After leaving the supply house, the employee causes an accident.

Was the employee driving on company business?

That question may become important after the accident.

Janitorial companies should define what qualifies as authorized business driving.

Consider:

• Supply runs
• Travel between jobs
• Bank deposits
• Equipment pickup
• Customer errands
• Trips to the company office
• Emergency supply purchases

Small errands can create large claims.

Therefore, managers and supervisors should understand the company’s vehicle-use rules.

What About 1099 Cleaners and Subcontractors?

Subcontractors create another layer of auto exposure.

A cleaning subcontractor may drive a personal vehicle to your customer’s building.

They may also have employees driving vehicles.

Do you know what auto insurance they carry?

Your subcontractor approval process should address that question when auto exposure exists.

Consider:

• Who drives for the subcontractor?
• What vehicles are used?
• What auto insurance is maintained?
• What limits are required?
• Does your customer contract impose auto requirements?
• Does your subcontractor agreement address auto insurance?

This connects directly to the issues we discussed in 1099 cleaners and independent contractors in Florida.

Outsourcing the cleaning work does not guarantee that your company will never be named after an accident.

Therefore, subcontractor insurance requirements should reflect the actual exposure.

Transporting Employees Can Increase the Severity

Janitorial companies sometimes transport several employees in one vehicle.

A supervisor may pick up four crew members and drive everyone to a customer location.

Now imagine that vehicle is involved in a serious accident.

One crash could involve:

• The driver
• Several employees
• Third-party drivers
• Passengers
• Multiple vehicles

That creates the potential for significant severity.

Injuries to employees may also create questions involving workers’ compensation for Florida janitorial companies.

This is another reason to look at the entire transportation system.

Do not simply ask whether the van is insured.

Ask who rides in it, who drives it, and how often it is on the road.

Cleaning Chemicals and Equipment Create Vehicle Risks Too

Janitorial vehicles carry more than people.

They may also carry:

• Bleach
• Disinfectants
• Floor chemicals
• Acids
• Fuel
• Floor machines
• Pressure washers
• Ladders
• Vacuums
• Tools

Those items create additional risk.

A poorly secured floor machine could move during an accident.

A chemical container could leak.

Equipment could be stolen from the vehicle.

A spill could create cleanup or pollution concerns.

Therefore, janitorial companies should have procedures for transporting equipment and chemicals.

Employees should know how to secure equipment properly.

Chemical containers should be stored and transported appropriately.

We will examine cleaning chemical insurance risks in greater detail later in this series.

Most importantly, do not assume the commercial auto policy automatically covers every possible loss involving equipment, cargo, or chemicals.

Different exposures may involve different coverage forms.

Does Commercial Auto Cover Cleaning Equipment Inside the Vehicle?

Imagine someone breaks into your company van overnight.

They steal several expensive vacuums, floor machines, and other equipment.

The van is insured.

Does that mean everything inside the van is automatically covered by the commercial auto policy?

Not necessarily.

The vehicle and the property inside it can create separate insurance exposures.

Commercial property or inland marine coverage may be important for equipment and tools that move between customer locations.

This is why the broader Florida janitorial company insurance checklist includes more than general liability and auto insurance.

Your vehicles move the equipment.

That does not necessarily mean the vehicle policy insures all of it.

Driver Selection Is More Important Than the Insurance Policy

Insurance can help finance a covered accident.

It cannot make a poor driver safe.

That is why driver selection should be part of your auto risk-management program.

Before allowing someone to drive for the company, establish qualification standards.

Your process may include:

• Valid driver’s license
• Motor vehicle record
• Driving history
• Personal auto insurance when applicable
• Driver acknowledgment
• Required training

Work with your insurance carrier and insurance professional when establishing appropriate standards.

Do not invent arbitrary rules that conflict with your carrier’s underwriting requirements.

Review Drivers After They Are Approved

Driver qualification should not be a one-time event.

People receive tickets.

Licenses can be suspended.

Driving records change.

Insurance can lapse.

Therefore, consider an ongoing process that includes:

• Periodic MVR reviews
• License verification
• Accident reporting
• Personal insurance verification
• Driver training
• Corrective action

Your company should know when a driver’s record changes.

Your commercial auto carrier should not be the first person to discover that an employee has a poor driving record.

Create a Written Fleet and Driver Safety Policy

A written policy gives employees clear expectations.

It also gives supervisors a consistent process to follow.

The policy should reflect your operation, vehicles, insurance requirements, and company rules.

Topics may include:

• Authorized drivers
• Seat-belt use
• Distracted driving
• Cellphone use
• Speeding
• DUI
• Vehicle maintenance
• Personal vehicle use
• Passenger rules
• Accident reporting
• MVR standards
• Personal insurance requirements
• Vehicle inspections
• Company vehicle take-home rules

The policy should also explain the consequences for violating company rules.

However, a written policy only works when management enforces it.

A policy sitting in an employee handbook will not prevent accidents by itself.

Distracted Driving Is a Management Problem

Phones have created a major challenge for businesses with employees on the road.

Janitorial employees may use phones for:

• GPS
• Scheduling
• Customer calls
• Supervisor calls
• Text messages
• Dispatch instructions
• Timekeeping apps

The company may tell employees not to use their phones while driving.

Then a supervisor sends a message and expects an immediate response.

That creates a problem.

Management behavior should support the company’s safety policy.

If your policy says employees cannot text while driving, managers cannot expect drivers to answer immediately while they are on the road.

Create a system that allows employees to stop safely before responding.

Safety expectations should apply to everyone.

What Should Employees Do After an Accident?

Employees should know what to do before an accident happens.

Create a written accident-response procedure.

Depending on the circumstances, employees may need to:

• Seek emergency assistance
• Contact law enforcement when appropriate
• Notify their supervisor
• Exchange required information
• Take appropriate photographs
• Identify witnesses
• Document the location
• Report the accident promptly

Employees should avoid arguing about who caused the accident.

They should also avoid making promises about payment or insurance coverage.

Instead, gather the appropriate information and follow the company’s reporting procedure.

Consider keeping accident instructions inside company vehicles.

You can also make them available electronically.

The goal is simple.

An employee who has just been involved in an accident should not have to guess what happens next.

Commercial Auto Claims Can Become Umbrella Claims

Auto accidents can create significant liability.

A severe accident may involve several injured people and multiple damaged vehicles.

In some cases, damages can exceed the primary commercial auto liability limit.

That is where umbrella or excess liability coverage may become important.

However, do not simply assume your umbrella covers every auto exposure.

Review how the umbrella coordinates with the underlying commercial auto policy.

Also consider whether hired and non-owned auto exposures are addressed appropriately within the overall program.

Severity planning becomes increasingly important as your company grows.

More vehicles can mean more exposure.

Adding drivers can increase that exposure even further.

More miles can mean more exposure.

Transporting employees can increase potential severity.

The more miles your employees drive, the more important severity planning becomes.

Florida Janitorial Fleet & Driver Safety Checklist

Every janitorial company should understand who drives on behalf of the business.

Start with a vehicle inventory.

Vehicle Inventory

Identify:

• Company-owned vehicles
• Rented vehicles
• Borrowed vehicles
• Employee-owned vehicles used for business
• Subcontractor vehicles

Do not stop with vehicles titled in the company’s name.

Driver Inventory

Track:

• Employee name
• Driver’s license
• MVR review date
• Approved driver status
• Company vehicle assignment
• Personal vehicle use
• Personal insurance verification

Update this information when something changes.

Coverage Review

Discuss with your insurance professional:

• Commercial auto liability
• Physical damage
• Hired auto
• Non-owned auto
• Umbrella or excess liability
• Uninsured or underinsured motorist coverage as applicable

The goal is to match coverage with actual operations.

Vehicle Safety

Review:

• Preventive maintenance
• Vehicle inspections
• Tire condition
• Equipment securement
• Chemical storage
• Accident kits
• Vehicle cleanliness and visibility

A company vehicle is a workplace.

Treat it like one.

Driver Safety

Address:

• Distracted driving
• Cellphone use
• Seat belts
• Speed
• DUI
• Accident reporting
• MVR reviews
• Driver training

Then enforce the rules consistently.

You Don’t Have to Own the Vehicle to Own the Risk

Most janitorial company owners understand why the company van needs insurance.

The hidden exposure is everything happening outside that van.

Employees drive personal vehicles.

Supervisors transport crews.

Workers pick up supplies.

Companies rent vehicles.

Subcontractors drive to customer locations.

All of those activities can create business exposure.

That is why a strong commercial auto program begins with a simple question:

Who drives because of our business?

Then ask:

What are they driving?

Where are they going?

Who are they transporting?

What are they carrying?

What insurance applies?

Once you know those answers, you can build a better insurance and risk-management program around the exposure.

Because you do not have to own the vehicle to become part of the claim.

If someone is driving because of your business, that trip deserves to be part of your risk-management conversation.

Download the Florida Janitorial Fleet & Driver Safety Checklist

Do you know everyone who drives on behalf of your janitorial company?

Download our Florida Janitorial Fleet & Driver Safety Checklist to review company vehicles, personal vehicles, drivers, insurance, MVRs, equipment, and accident procedures.

Use it to identify:

• Every company vehicle
• Every employee using a personal vehicle
• Every approved driver
• MVR review dates
• Personal auto insurance verification
• Hired and non-owned auto exposure
• Fleet safety procedures
• Accident-response protocols

Review it when hiring drivers, adding vehicles, changing insurance, and preparing for renewal.

Because the best time to discover an auto coverage gap is before the accident.

Not after it.

Frequently Asked Questions