Hired and non-owned auto insurance

Commercial auto insurance only covers business-owned vehicles. Hired and non-owned auto insurance (HNOA) protects vehicles that your business uses but doesn’t own, such as rented, leased, and personal vehicles.

Hired and non-owned auto insurance coverage can help you avoid having to pay for auto liability lawsuits on your own. This type of lawsuit can be extremely expensive, especially if someone is injured, and could financially devastate your small business.

Your personal auto policy covers you while driving to and from work, though it might not cover you for accidents that happen while performing work-related tasks, such as picking up supplies or making deliveries. This means you could be personally liable for non-owned auto liability lawsuits unless you have HNOA insurance coverage.

HNOA insurance helps cover liability expenses, including lawsuits, related to car accidents that occur in your personal, rented, or leased car that you use for business purposes.

Specifically, HNOA insurance coverage includes:

Many businesses add hired and non-owned auto coverage to their general liability insurance or their commercial auto insurance policy. You can also purchase HNOA insurance separately (depending on the carrier), 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.

Non-owned auto insurance benefits a variety of small business owners that utilize personal, leased or rented vehicles for their business.

You might consider a HNOA insurance policy if:

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 own 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 own car to meet a client. Because personal auto insurance doesn’t cover work driving, the other party could sue to recoup medical expenses or repair costs.

If you're an independent contractor or self-employed, your personal auto insurance won't provide protection if you're in an accident while completing a work errand. HNOA insurance would provide the same coverage to you as if you're an employee.

If your business rents vehicles such as trucks or vans, or operates under a trucking contract, HNOA insurance would provide coverage for your rented automobiles.

For example, if you or an employee has an accident while driving a rental car during a delivery run, HNOA insurance covers the costs of any resulting lawsuits.

While non-owned auto insurance does provide coverage for several liabilities, it does not provide all the protection that a small business might need.

For instance, a HNOA policy does not cover:

Personal auto insurance policies only cover claims related to personal use, including your commute and travel unrelated to work. They have lower limits and usually cost less.

If you’re involved in an accident while driving your personal car for work, your insurance company might refuse your claim. That’s why small business owners who own a car used for work should consider commercial auto insurance or HNOA coverage.

If you’re uncertain which policy you need, check with an insurance agent.

HNOA insurance limits can be defined as the maximum amount of money your insurance company will pay. These limits are set when purchasing your HNOA policy and often match the limits of your general liability policy.

Among Insureon policyholders, the average limit is $1 million for auto insurance.

Business owners can usually get proof of insurance online on the same day that they start a small business insurance policy through Insureon.

It can take several weeks for a traditional insurance agency to send a certificate of liability insurance to new customers. That’s an issue for business owners who need immediate proof of insurance.

With Insureon, you can quickly provide proof before a vehicle is used for business purposes. If your bank or lessor requires other proof of insurance, you can contact an agent for more information.

Small business owners can extend their HNOA coverage to subcontractors and other individuals as additional insured endorsements.

For example, a business hires a contingent worker through a staffing agency to assist with a temporary employee shortage. The business could add an endorsement to the HNOA policy that would allow the temporary employee to drive leased, rented, and personal vehicles for a fixed period of time.

A temporary substitute automobile is a vehicle that is temporarily used by the non-owner as a substitute ("loaner") vehicle. A common example of this is when an auto repair shop provides temporary substitute vehicles for customers while they wait for their repairs.

If you're on the road with a temporary vehicle while using it for business purposes and get into an accident, your HNOA and personal auto policy would not cover the costs, and the expenses would be your responsibility.

If you plan on regularly using temporary substitute vehicles, you may want to consider a business auto policy (BAP) which covers all vehicles used by your business and your employees, including temporary substitute automobiles.

If you want to learn more about this policy, you can find additional answers in our frequently asked questions about hired and non-owned auto insurance.

If you have any additional questions about coverage or building your risk management plan, you can contact an Insureon agent.