Hired and Non-Owned Auto Insurance Definition

The "Legal-Ease" Glossary
Hired and Non-Owned Auto Insurance

This is a type of auto coverage that helps pay for commercial liability expenses arising from accidents in rental cars and employee vehicles.

Your small business might need a Hired and Non-Owned Auto Insurance (HNOA) policy if you or your employees use personal vehicles or other vehicles that your business does not own (e.g., rented cars) for business purposes. If you use such a vehicle to run business errands and are involved in a collision, HNOA can cover attorney fees, settlements or judgments, and other court costs if your business is sued over the accident (e.g., for medical expenses or property repair costs).

However, HNOA can’t cover…

  • Physical repair expenses for the rented or employee-owned vehicle.
  • Accidents that occur during commutes.
  • Accidents that happen when an employee runs personal errands during work hours.

It's important to note that most personal auto policies don’t cover accidents that happen while traveling for work. (You can learn more about the limits of personal auto insurance in our blog post, “Uber, Lyft...and You? When Personal Auto Insurance Is Not Enough.”) That’s why, if you frequently rent cars for work or rely on your employees to run business errands in their own vehicles, HNOA may be a wise investment. After all, lawsuits over auto collisions can be very, very expensive.

On the other hand, if your business owns vehicles, it will need to rely on Commercial Auto Insurance for liability protection. You can learn more about the differences between Commercial Auto and HNOA in the article “Commercial Auto Insurance vs. Hired and Non-Owned Auto Insurance.”

If you’re interested in adding Hired and Non-Owned Auto coverage to your business protection plan, your small business has two options. You can purchase it as a standalone policy, or you can add it on as a rider to your General Liability Insurance.

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