Non-Owner Car Insurance in a General Liability Policy
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Many small-businesses owners wonder who is responsible for an accident if one of their employees crashed his own car while working for them. Can you be sued in this situation? What about if an employee is renting a car for a business trip?

While it might seem like your employee should be at fault, the truth is that the small business can be held legally responsible. One employee accident can lead to a lawsuit filed against your company.

For many small businesses, auto liabilities are a part of their everyday risks. That's because many small business can't afford "company cars" and require their employees to drive their own vehicles. To cover these risks, there's Non Owner Car Insurance (also called Hired and Non-Owned Auto Insurance), which can be added to your General Liability Insurance.

What Does Hired and Non-Owned Auto Insurance Cover?

Non Owned Vehicle Insurance covers your liabilities when an employee crashes a car the business does not own while driving on behalf of the business. Simply put, this insurance cover medical, property damage, and legal expenses related to covered accidents.

Here's an example: a contractor asks one of his employees to pick up lunch for the other guys on the crew. While driving to McDonald's, the employee takes his eyes off the road and rear-ends the car in front of him. The victim sues the contractor's business for the medical cost of their whiplash and back injury ($100,000). The contractor's Hired and Non Owned Auto Insurance covers the $100,000 and pays for the company's legal expenses.

Do I Need Non-Owner Car Insurance?

If your employees drive their own cars (or rental cars) for business purposes, you'll need to cover this liability with Hired and Non-Owned Insurance. This includes small businesses that make deliveries, travel to client locations, or require their employees to travel.

One benefit to this coverage is that it covers rental cars. Typically, when your business rents a car, you might have to purchase the rental car company's insurance. However, if you already have Non-Owner Car Insurance, you're covered. The policy can save you a little bit of money.

What Types of Commercial Car Insurance Are There?

There are actually two types of Non-Owner Car Insurance:

  • Hired Auto Coverage. Insurance for businesses that drive borrowed, leased, hired, or rented automobiles.
  • Employer's Non Ownership Coverage. Insurance for businesses that ask their employees to drive their own cars for work.

You can buy one or both of these insurance policies depending on the needs of your business.

How Do I Get Hired and Non-Owned Auto Insurance?

Many small-business owners purchase Hired and Non Owned Auto Insurance with their General Liability Insurance policy. Auto coverage can be added to your policy as a "rider" — a term for an additional coverage that is tacked on to a main policy.

How Much Does Non-Owner Car Insurance Cost?

As you would expect, commercial auto coverage varies depending on the type of driving you and your employees do, the number of cars in use, and the industry you work in. Just like with personal auto insurance, you might have to pay higher premiums if you or your employees have a poor driving record.

For a free insurance quote for General Liability Insurance with Non Owner Car Insurance, contact Insureon.

General Liability Insurance: Further Reading

General liability insurance in the Insureon blog