Federal Paper Box Company Hears About Non-Ownership Liability Insurance

Rough Notes, Sep 2005 by Tibbets, Frank D

Mr. Tibbets, in interesting dialogue form, tells bow Agent Bill Howe presents Non-Ownership Automobile Liability insurance to a valued client who has other insurance with his agency. There are a lot of such "Mr. Smiths" on many agents' books who ought to be receiving similar treatment.

(ProQuest Information and Learning: ... denotes text stops here in original.)

"OPERATOR, please get Mr. Smith, vice-president of the Federal Paper Box Company, on the phone," said Bill Howe, insurance agent. A few moments later the following conversation ensued:

"Hello, Joe, this is Bill Howe."

"Yes, Bill, what's on your mind this morning?"

"I want to know when you can spare me a few minutes; I'd like to talk to you about Automobile insurance for your company."

"Automobile insurance? What do you mean?-you know that we do not own any cars."

"Yes, I know, that's just the point and is probably why we have both overlooked the fact that you need Automobile insurance protection."

"Well it sounds like a riddle to me."

"The idea is this, Joe, you require your salesmen to use their own cars in your business. While these cars are being used for your business there is a definite liability on the part of the Federal Paper Box Company. There has been designed a form of insurance to protect you against this liability and that is why I want to talk to you."

"It sounds interesting, Bill, come over any time this afternoon."

"All right," answered Bill. "I'll see you then," and hung up.

"You see," said Bill, turning to his partner, "that Federal account means a great deal to us. We have the Compensation and the Public Liability on their plants as well as the Engine, Machinery and Fire insurance and I don't want any other agent to come along and point out to Joe Smith that we are leaving a gap in his insurance coverage by not selling him Non-Ownership Auto Liability protection. He leaves his insurance needs pretty much to us and it is our duty to advise him, at least, of the kinds of coverage available and necessary. I am combing our present list of Compensation policyholders and fleet schedule risks with the one idea in mind of bringing to their attention the need for Non-Ownership Auto coverage."

That Afternoon-the Interview

"Well, here I am, Joe, and I can see you're busy as usual, so I'll try to make it snappy. You depend on me to bring to your attention the kinds of insurance you need and that is why I want you to know about Non-Ownership Automobile insurance."

"So that's what you call it," said joe.

"Yes, it used to be called 'Auto Contingent insurance' but, inasmuch as there is nothing contingent about it, the new term was adopted. As I mentioned on the 'phone this morning, your salesmen, while using their cars in your business, are acting as your agents and accidents which they cause, while so engaged, may very properly be laid at your door. You know very well that it would be an easy matter for a clever attorney, for the injured, to uncover the existence of agency in such a case and the next step would be to bring the claim against the salesman and your concern jointly."

"Yes, Bill, but I have always understood that the salesman's Auto policy protected us in addition to the salesman himself."

"It does if he has insurance and if his policy has the so-called omnibus coverage clause, but do you know if all your salesmen have insurance and, if they do, whether or not it is carried in substantial companies and, furthermore, if the limits are sufficient to take care of a substantial verdict?"

"Well-er, no, and it would involve considerable time and expense to ascer; tain that information, especially where our sales force is growing and changr ing."

"That's just the idea. Now with this kind of insurance, you would not nee4 to know or care whether your salesman had the right kind of insurance or not."

"What is the cost of this Non-Ownership Automobile protection?"

"To answer that I will have to get the facts as to the number and location of your sales force and the number of employes in your office and plants."

"How do our office or plant employes enter into it?"

"Just this way, this protection should be blanket. We do not want any loop-holes. It is just possible that some plant employe or office employe might use his car for an errand for the company...

As Recounted by FRANK D. TIBBETS, Superintendent Automobile Department of Employers' Liability Assur. Corp., Ltd.