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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:

  • You Hired a Vehicle: this provides coverage when you or your employees drive a rented, leased, or borrowed car for business purposes.
  • You have Non-owned autos: This portion of the coverage applies when employees are using their own cars for business. It provides extra coverage over the employee’s personal auto coverage for bodily injury and property damage liability.

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:

A personal car is used by you or an employee

The use of personal vehicles in the operation of a small business is extremely common.  Frequently, the business asks employees to use their personal vehicles and is unaware they need the protection of HNOA coverage. Or, because employee errands are so infrequent, the risks are discounted. This can lead to coverage gaps and financial consequences.

Consider this, your employee runs a quick errand for the business in their personal vehicle and has an accident. They are determined to be at fault. After reporting the claims, you learn that the employee’s personal auto policy has an exclusion for business use. Without non-owned auto coverage, you may have to pay these damages out-of-pocket.

Are you self-employed or a contractor?

Many contractors or self-employed business owners use their personal vehicles in their business operations. If you’re an independent contractor or self-employed and relying on your personal auto insurance, you need to make sure that you’re the type of business use is not excluded. If it is, you may need HNOA coverage, or possibly a commercial auto policy.

You business will rent or borrow vehicles

If your business rents vehicles, including trucks or vans, hired and non-owned auto coverage is necessary coverage for you.

For example, if you or an employee has an accident while driving a rented vehicle while picking up materials or inventory, you will need to rely on hired auto coverage for liability costs resulting from claims or lawsuits.

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More questions about hired and non-owned coverage.

What’s the difference between commercial auto and HNOA?

Commercial auto insurance helps protect the company vehicles that your business owns. Under a commercial auto policy, you can select both liability coverage, as well as collision and comprehensive coverage. This is different from hired and non-owned auto coverage which only provides liability coverage for damages caused while you or an employee is operating a rented or borrowed vehicle.

Can I get HNOA with a personal auto policy?

No. Your personal auto insurance policy does not provide coverage for your business-rented vehicles, and cannot provide protection for your employees’ cars. In fact, it may have exclusions for business use, and may not even cover you when using your car for business.

How can I get hired and non-owned auto coverage?

You can get hired and non-owned auto coverage as an endorsement to your commercial auto policy, or your business owner’s policy (BOP). We offer commercial auto insurance and BOPs and can help you purchase hired and non-owned auto coverage as well. Whether you’re looking for the right type of business insurance or need help filing a claim, we’re here for you.

Get a small business insurance quote today and learn how we can help protect you and your employees on the road.