What is hired and non-owned auto insurance?

It depends. If your business regularly uses vehicles that it doesn't own, you likely need hired and non-owned auto insurance (HNOA).

This policy covers vehicles that belong to you personally or to one of your employees. It also includes vehicles that your business rents or leases.

Small businesses often need this coverage without realizing it. You might not think it’s a big deal to occasionally ask employees to use their personal vehicles for work errands. But that can lead to auto liability issues.

For example, an employee might be involved in an accident while driving their car to meet a client. Because personal auto insurance doesn’t cover work driving, the other party could sue to recoup medical costs or other expenses.

Your business might also rent trucks or vans for deliveries. If you or an employee has an accident while driving a rented vehicle, HNOA covers the costs of any resulting lawsuits.

Hired and non-owned auto insurance keeps you and your employees from paying for auto liability lawsuits on your own. This type of lawsuit can be extremely expensive, especially if someone is injured.

Your insurance company most likely won’t allow you to use personal auto insurance for work-related accidents. That means you could be personally liable for non-owned auto liability lawsuits unless you have HNOA coverage.

Hired and non-owned auto insurance provides liability coverage, but it doesn’t cover damage to the vehicle that was being driven.

For example, say one of your employees drives to the bank to make a deposit for your business. If the employee gets into an accident, HNOA would pay for your business’s defense (since the employee was going to make a deposit on behalf of your business) but it would not pay for the damages to the employee’s car.

HNOA covers business owners and employees who use personal vehicles for deliveries, work trips, transporting clients, or other business purposes. It doesn’t cover accidents that occur while you’re commuting or running personal errands.

It also doesn’t cover vehicles owned by your business. The right policy for that is commercial auto insurance.

Many businesses add hired and non-owned auto coverage to their general liability insurance policy. You can also purchase HNOA separately, but sometimes buying the policies together can lower your insurance rates.

If your small business has higher than average non-owned auto liabilities, you can increase your coverage limit with commercial umbrella insurance. Umbrella insurance increases your maximum policy limit, meaning your insurance company can cover more expensive lawsuits.

To get started, fill out Insureon’s online application for small business insurance. Make sure to check boxes and answer questions related to hired and non-owned auto insurance to get quotes for this coverage.

Hired and non-owned auto insurance covers vehicles that your business uses but doesn’t own. Commercial auto insurance covers business-owned vehicles.

A commercial auto policy is usually required by state law when your business owns a vehicle. This policy is typically more expensive, but it offers more coverage.

Commercial auto covers both auto liability (if you’re sued for bodily injury or property damage) and physical damage caused by accidents, theft, vandalism, and storms.

Learn the difference between HNOA and commercial auto insurance.