As of July 2022, unemployment in Minnesota was 1.8% and nationally it was 3.7%. This has caused many employers to hire younger and less experienced staff just entering the job market. New employees are often asked to use a business vehicle to complete tasks typically assigned to those with more seniority. Anyone who has added a youthful driver to their auto policy knows this isn’t cheap. Not surprisingly, it is the same for business policies. This blog explores some of the considerations when employing youthful drivers
Insurance carriers know all too well the demographics of motor vehicle accidents. Youthful drivers are at the top of this list year in and year out and carriers charge more accordingly. AAAfoundation.org reports that youthful drivers between the ages of 16-19 years old are nearly four times more likely to be involved in an auto accident than anyone else. For every 1,000,000 miles driven, youth ages 16-19 were involved in 2,162 crashes. Meanwhile, those between 20-24 were involved in just 572.
It is important that policy holders give serious consideration to the additional exposure they take on with a youthful driver. Weigh the potential negative consequences of a serious accident carefully. One way a policy holder, either business or personal, can further protect themselves is to add an additional layer of coverage with an Umbrella Policy.
What is an Umbrella Policy?
Umbrella policies increase the liability limits available to an insured and help protect the household or business from large losses exceeding the primary policy limits. Any business is susceptible to a potentially catastrophic claim, but some businesses with heavy auto exposures are especially at risk. A typical commercial umbrella policy ranges from $1,000,000 to $5,000,000. In a worst-case scenario that involved property damage, bodily injury or death to another party, that umbrella limit could be what insulates the insured’s business and/or assets from claims exceeding their underlying primary auto policy or general liability policy limits.
Here at Reliable Agency, Inc. we pride ourselves on being able to help our clients identify solutions to their insurance needs to protect their business interests. Be aware of all the considerations when employing youthful drivers. Adding a commercial Umbrella Policy may be the right choice for your business.