Hired and Non-Owned Auto Insurance

Your business may not own a single vehicle and still face auto liability. An employee drives to the bank to make a deposit. A salesperson takes a personal car to meet a client. A manager rents a car on a business trip or rents a truck to move equipment between job sites. If one of those drivers causes an accident while doing work for you, the injured party may look to your business for payment.

Hired and non-owned auto insurance (HNOA) is designed to help protect your business in situations like these, subject to the policy terms. Insurance Bind helps businesses add HNOA coverage, either on its own or alongside a business owners policy or commercial auto policy.

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What "hired" and "non-owned" mean

Hired auto refers to vehicles your business rents, leases for a short term, hires or borrows. Examples include a rental car on a business trip or a moving truck rented for a job.

Non-owned auto refers to vehicles your business does not own, lease or rent but that are used in your business, most commonly employees' personal cars used for work errands.

Most businesses buy both together because both exposures appear as soon as anyone drives for work.

What HNOA typically covers

HNOA is liability coverage. It is designed to respond when your business is legally responsible for:

  • Bodily injury to other people in an accident involving a hired or non-owned vehicle used for your business
  • Property damage to other people's property, such as another driver's car or a storefront
  • Legal defense costs if your business is sued over a covered accident, depending on the policy

In a non-owned situation, the employee's personal auto policy is generally expected to respond first. HNOA may then respond for the business, subject to its terms, when claims exceed that policy's limits or when the business itself is named in a lawsuit.

What HNOA typically does not cover

Understanding the limits is just as important:

  • Damage to the hired or non-owned vehicle itself. HNOA does not pay to repair the employee's car or the rental vehicle. Rental physical damage may need separate coverage.
  • Injuries to your own employees, which are generally a workers' compensation matter
  • Vehicles your business owns, which belong on a commercial auto policy
  • Personal use of the employee's vehicle, such as commuting or personal errands
  • Regular use of a vehicle furnished to an employee may be treated differently; ask how your policy handles it

Exact terms vary by insurer and policy.

Which businesses commonly need HNOA

  • Offices and professional firms whose staff drive to clients, the bank or the post office
  • Contractors whose crew members use personal trucks to pick up supplies or get to job sites
  • Restaurants with delivery drivers using their own cars
  • Retail and service businesses that send employees on errands
  • Any business that rents vehicles for travel, events or moving equipment
  • Nonprofits with volunteers driving their own cars on the organization's behalf

General liability policies usually exclude auto accidents, so a business that relies only on GL may have a gap here.

How HNOA is purchased

HNOA is commonly added as an endorsement to a business owners policy (BOP) or a commercial auto policy, and some insurers offer it as a standalone policy. If your business owns vehicles, HNOA can be added to your commercial auto policy. If it does not, an endorsement on your BOP or a standalone policy may be available, depending on the insurer.

What affects the cost

Insurers commonly consider:

  • How many employees drive for work and how often
  • The type of driving, such as occasional errands versus regular deliveries
  • Annual spending on rental vehicles
  • Your industry and claims history
  • The liability limits you choose

Information to have ready for a quote

  • Business name, address, industry and years in business
  • Number of employees, and how many drive personal vehicles for work
  • Whether employees make deliveries
  • Approximate annual rental vehicle use
  • Current policies, especially your BOP or commercial auto policy

Frequently asked questions

Do your employees ever drive for work? Tell us about your business and we'll help you compare hired and non-owned auto options.

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Insurance Bind / InsuranceBind Insurance Agency is an independent insurance agency, not an insurance company. Submitting a quote request does not bind coverage. Quotes and coverage are subject to insurer underwriting. Coverage descriptions are general; the policy governs.