Hired and Non-Owned Auto Coverage

It’s common for small businesses to use vehicles in their daily operations. When vehicles are part of your small business, there may be a time when you need to rent, lease, or borrow a vehicle. This can present you with unique driving risks. That’s where hired and non-owned auto coverage helps.

Hired and non-owned auto coverage, sometimes called HNOA, is a type of business insurance, protection designed to cover property damage or bodily injury that your business causes other people in two unique situations:

What is a hired auto?

When you’re dealing with business insurance, “hired auto” refers to any vehicles that you hire, rent, or borrow to perform your business operations. If you’ll need this type of protection for your business, you’ll need to add hired auto coverage. Therefore, if you or your employee have a covered commercial auto claim while driving a hired, rented, or borrowed vehicle, you can have proper protection.

What’s a non-owned auto?

Non-owned vehicles are different from “hired” vehicles. Sure both are not owned by the business, but Non-owned refers to personal cars owned by your employees but used for business purposes. 

Example: An employee drives their personal vehicle to run an errand for your business. While performing the errand, the employee has an accident. If the employee is at-fault for damages to the other party, your non-owned auto coverage can help pay for damages. Note: this coverage is secondary to the employee’s personal auto insurance coverage, and only pays for costs that exceed the employee’s liability limits. 

What does HNOA cover?

This protection is for vehicles your business does not own. Vehicles like personal cars, or vehicles leased or rented by the business. HNOA insurance helps cover liability expenses, including lawsuits, related to car accidents that occur when these types of vehicles are used by the business.

Specifically, HNOA insurance coverage includes:

• Property damage liability: Physical damage to another person’s car
• Bodily injury liability: Bodily injuries and medical expenses if someone else gets hurt in an accident
• Legal expenses: If your business gets sued for negligence

What doesn’t it cover?

While hired and non-owned auto coverage is a form of liability insurance, it is specialized for vehicles that are not owned by the business. As liability coverage, it doesn’t provide protection for the business-owned property.  This means it won’t help with:

• Property damage to your non-owned vehicles borrowed, leased, or rented by the company.
• Medical expenses if you or your employee get hurt in an accident while using rented or personal vehicles.
• Liability coverage, damages, or bodily injury from an accident while you or your employee drive for personal reasons that are not related to your business.

Who needs hired and non-owned auto coverage?

If your business rents or borrows vehicles to do work or if your employees use their personal vehicles on business, getting hired and non-owned auto coverage is important. 

You should consider buying HNOA coverage if any of these apply: