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What Is Commercial Hired & Non-Owned Auto Liability Coverage?

commercial hired vs now owned liability coverage Newton Massachusetts

Commercial auto insurance covers automobiles, trucks, and other vehicles that your business owns. Policies can cover:

  • Auto liability if you damage another party's automobile
  • Medical expenses for injuries sustained in a crash
  • Physical damage caused by wrecks, theft, vandalism, and storms
  • Uninsured motorists who cause accidents and don’t have coverage

If you drive a company vehicle to meet clients or transport equipment, raw materials, or products, you'll need commercial auto insurance coverage.

Hired and non-owned auto insurance (HNOA insurance) covers liability expenses for accidents involving vehicles that your business uses for work purposes but doesn’t own. This includes vehicles that your business rents, as well as your employees’ personal vehicles that are used for work errands.

This protection applies to vehicles you “hire” (like a rental car) or vehicles your business doesn’t own (like employees' personal vehicles).

Hired Auto coverage can help fill the gap in your personal auto liability insurance for work-related driving (note: personal policies tend to exclude this activity). It can even take the place of the liability coverage you may need for a rental car. It’s important to know that Hired Auto coverage can address your company's liability, but it doesn’t offer liability protection for the person driving the car. Whoever was behind the wheel may be personally liable for third-party injuries or property damage.

Non-Owned Auto coverage can help pay for legal expenses if your business is sued over a car accident you or your employees caused while driving a personal vehicle for business errands. Just like Hired Auto, it only covers the company’s liability, and its role is to fill the gap in personal auto liability coverage, which doesn't cover business driving. Keep in mind that whoever was driving can still be held personally liable for any damage or injuries they cause.

For example, if your employee drives his car to drop off a business deposit at the bank and causes an accident, the other driver can sue your business for expenses related to the crash (e.g., medical treatment and vehicle repair damages). HNOA insurance can cover these costs.

Many companies rent trucks for deliveries or transporting passengers. If an accident should occur in one of these rented vehicles, HNOA insurance can cover those liability expenses, too.

Note: HNOA insurance doesn’t cover accidents that occur during commutes or personal errands during business hours. It also can’t pay for physical damages to the non-owned vehicle.

You can usually add this coverage as an endorsement to your General Liability Insurance or Commercial Auto Insurance coverage.

If your business owns vehicles, but also rents vehicles or uses employee cars for business purposes – say during peak seasons or special events – you might need both types of auto insurance.

We would love to answer any questions that you might have. Contact Kovalev Insurance today and request a complimentary consultation to ensure your business is properly protected.

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