The courts have held that “the secured party is responsible for the actions of others taken on the secured party’s behalf, including independent contractors engaged by the secured party to take possession of collateral”.   In other words, without the proper insurance coverage, the lien holder is liable for any damages claimed by the debtor from the initial assignment to its final resolution. Countless judgments, ranging from the hundreds to millions, have been awarded to debtors including wrongful repossession, breach of peace, property damage and bodily injury.  Basic tow coverage and garage keepers liability is not “full coverage” and exposes the lender to unnecessary lawsuits.

When selecting a repossession agency first determine if the Certificate of Insurance provides automobile liability including non-owned, hired and repossessed auto’s with “on-hook” coverage.  In order to extend this coverage to the lien holder, the lender must be added as a “certificate holder” to the policy. 

Injury to a repossession agent, in the act of fulfilling the contractual assignment, is a potential claim to the lien holder if the company retained does not provide Workers Compensation to its agents in the field.

Knowledge is imperative when selecting a repossession agency and research is key to making an informed decision.