If you run a home healthcare agency, here's something that might surprise you: your business could be on the hook for tens of thousands—or even millions—of dollars if one of your employees gets into a car accident while driving to see a patient. It doesn't matter if they're driving their own car. It doesn't matter if your agency doesn't own a single vehicle. When your employee is on the clock and behind the wheel, your business faces serious liability exposure.
Many home healthcare business owners mistakenly believe that since they don't have a fleet of company vehicles, they don't need commercial auto insurance. That's a dangerous assumption. The reality is that most home healthcare workers drive their personal vehicles from patient to patient throughout the day, and when they're doing that, they're conducting business on your behalf. If they cause an accident during those trips, your agency can be named in the lawsuit.
Let's break down what you actually need to know about commercial auto insurance for your home healthcare operation—and why getting this right could save your business from financial disaster.
Why Personal Auto Insurance Doesn't Cover Business Use
Here's where things get tricky. Your employees probably have personal auto insurance on their vehicles. You might assume that if they get into an accident while driving to a patient's home, their personal policy would cover it. Unfortunately, that's almost never the case.
Personal auto insurance policies typically exclude coverage for business use. Insurance companies consider business driving a different—and higher—risk than personal errands or commuting. When your employee is driving between patient visits as part of their job duties, that's clearly business use. If they cause an accident during that time, their personal auto insurer will likely deny the claim.
What happens then? The injured party—and their lawyers—will look for someone who can pay for the damages. That someone is often your home healthcare agency. Under the legal principle of vicarious liability, employers can be held responsible for injuries or property damage that occur when an employee is involved in a car accident while performing job duties. Even though you don't own the vehicle, you can still be liable.
This is where many home healthcare agencies get caught off guard. They're operating without proper coverage, completely unaware of the risk they're taking on every single day their employees are on the road.
Understanding Hired and Non-Owned Auto Insurance
The solution for most home healthcare agencies is called hired and non-owned auto insurance, often abbreviated as HNOA. This coverage is specifically designed for businesses whose employees drive vehicles that the business doesn't own.
Non-owned auto coverage protects your agency when employees use their personal vehicles for work. If your home health aide gets into an accident while driving their own car from one patient's home to another, this coverage responds. Hired auto coverage handles situations where your business rents or leases vehicles—say, if an employee's car breaks down and they rent one to complete their patient visits for the day.
This coverage typically costs between $7 and $12 per month per employee—a relatively small investment that can protect your agency from catastrophic financial loss. For a home healthcare business with ten employees, you're looking at around $70 to $120 monthly for this essential protection.
But here's the important part: HNOA insurance covers damages (bodily injuries or property damage) caused by employees while driving during the course of their work. It provides liability coverage for your business when an employee causes an accident in a vehicle you don't own. This can include medical expenses for injured parties, property damage repairs, legal defense costs, and any settlement or judgment amounts.
When You Need a Full Commercial Auto Policy
If your home healthcare agency owns, leases, or provides vehicles for employee use, hired and non-owned coverage isn't enough. You need a full commercial auto insurance policy. Most states legally require commercial auto insurance for business-owned vehicles, and this requirement applies regardless of your industry.
A commercial auto policy covers physical damage to your vehicles (whether from accidents, weather, theft, or vandalism) and liability for injuries and property damage your employees cause while driving company vehicles. The cost varies based on several factors: the number and type of vehicles you own, how frequently they're used, your employees' driving records, and where you operate.
Some larger home healthcare agencies maintain a small fleet of vehicles available for employee use. If that's your situation, you'll need both a commercial auto policy for those owned vehicles and HNOA coverage for when employees use their personal vehicles or rent cars.
Getting Your Coverage Limits Right
Here's something crucial that many home healthcare agencies get wrong: state minimum auto insurance limits are nowhere near adequate for business liability exposure. Many states require minimums as low as $15,000 to $50,000, but the average general liability policy for home healthcare operations carries limits of $1 million per occurrence.
Think about what could happen in a serious accident. Medical bills for a catastrophic injury can easily exceed $100,000. If multiple people are injured, or if there's a wrongful death claim, you could be looking at damages in the millions. State minimum coverage would be exhausted almost immediately, leaving your business assets and your personal assets at risk.
Industry experts recommend that home healthcare agencies carry auto liability limits of at least $100,000 per person and $300,000 per accident for bodily injury, plus property damage coverage. Many agencies opt for even higher limits—$1 million per occurrence is common—because the cost difference is often minimal compared to the additional protection.
You should also require your employees to carry adequate limits on their personal auto insurance policies. Even though HNOA coverage protects your business, having employees with proper personal coverage creates an additional layer of protection and demonstrates that your agency takes safety seriously.
Beyond Insurance: Risk Management Strategies
Smart home healthcare agencies don't rely on insurance alone to manage auto liability risks. They implement comprehensive risk management strategies that reduce the likelihood of accidents in the first place.
Start with your hiring process. Run motor vehicle record (MVR) checks on all employees who will drive as part of their job duties. Don't just check once—run these checks at least annually to catch any DUIs, accidents, or moving violations that occur after hire. Establish clear criteria for acceptable driving records, and enforce them consistently.
Create formal driving policies for your agency. These should cover expectations for safe driving, prohibitions on phone use while driving, requirements for vehicle maintenance, and protocols for reporting accidents. Make sure every employee who drives for work receives a copy of these policies and signs an acknowledgment that they've read and understood them.
Require proof that employees carry adequate personal auto insurance. At minimum, they should have coverage that meets your agency's standards for liability limits. Some agencies require employees to add a business use endorsement to their personal policies, though this can be expensive for the employee and may not provide coverage for the employer anyway.
Consider implementing a vehicle inspection program where employees certify that their vehicles are properly maintained and safe to drive. This can include checking that tires have adequate tread, brakes function properly, lights work, and there are no obvious safety issues.
Getting the Right Coverage for Your Agency
Commercial auto insurance isn't optional for home healthcare agencies—it's essential protection against potentially business-ending liability. The good news is that getting the right coverage doesn't have to be complicated or prohibitively expensive.
Start by honestly assessing your agency's situation. Do you own any vehicles? Then you need a commercial auto policy. Do your employees use their personal vehicles for work? Then you need hired and non-owned coverage. The answer for many agencies is that they need both types of coverage.
Work with an insurance agent who has experience with home healthcare businesses. The auto liability exposures for healthcare agencies are unique, and you want someone who understands the specific risks you face. They can help you determine appropriate coverage limits based on your geographic region, the number of employees you have, and the typical injury and property damage costs in your area.
Don't make the mistake of operating without proper auto coverage just because you don't own a fleet of vehicles. Every day your employees are on the road visiting patients, your agency faces serious liability exposure. The relatively small cost of hired and non-owned auto insurance is insignificant compared to the financial devastation of a single uninsured accident. Protect your business, your employees, and the patients you serve by making sure you have the right commercial auto coverage in place today.
