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What is Hired & Non-Owned Auto?

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  • What is Hired & Non-Owned Auto?

hired and non-owned autoHired and non-owned auto is a common endorsement to either the commercial auto policy or the general liability / BOP policy for a business.  It’s generally an inexpensive option to add to either policy and is a very needed coverage, yet many agents and brokers forget to add it to a client’s coverage program.

Here’s what it does.

When an automobile is used in a business, even for occasional usage, there is the potential of the business entity to be sued in the event of an auto accident.

Here’s an example of what I’m talking about.  Your company doesn’t own any vehicles, but your bookkeeper will run to the bank on occasion as need and uses her personal vehicle.

During one of these trips to the bank, there is a serious auto accident involving another vehicle where the other driver is injured and needs to go to the hospital.  A few weeks later that injured driver sues you and your firm.  What happens?

Many people assume that the bookkeeper’s auto policy will step in and pay the claim.  But that’s incorrect.  Your company is not an insured on her personal auto policy so there’s no coverage there.  Fortunately, her policy will protect her, but you and your firm are not.

This is where hired and non-owned auto steps in to protect your company from suits that may arise from auto-related losses.

How else does hired and non-owned auto step in to protect your company?  When renting a vehicle for business use the hired and non-owned auto endorsement will provide excess liability protection above the rental company’s liability limits.  But, hired and non-owned auto does not provide physical damage protection to rental vehicles, that must be endorsed as separate coverage and is usually charged for based on the cost of rentals for the year.

Have other questions regarding business auto insurance or business insurance in general?  Why not contact me, and let’s have a conversation you can start by clicking the next steps button below.


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