Hired & Non-Owned Auto Insurance: What Every Business Should Know

In today’s fast-moving world, many businesses rely on vehicles they don’t actually own. This can look like using an employee’s car for a quick errand, renting a car for a business trip, or borrowing a truck for a delivery. These everyday situations can create risks that aren’t always covered by standard insurance.

That’s where Hired and Non-Owned Auto (HNOA) coverage comes in. It helps protect your business when you or your team are driving vehicles not owned by the company.

At Rollo Insurance, we’re more than just insurance; we’re part of your community. We understand the challenges local businesses face because we live and work alongside you. Our team is here to make insurance simple, clear, and to protect the people and businesses that keep our communities moving forward.

Hired Auto vs. Non-Owned Auto: What’s The Difference?

While often bundled together, “hired” and “non-owned” refer to slightly different situations:

• Hired Auto: This typically refers to vehicles your business leases, rents, or borrows. This could include a rental car for a sales trip, a truck you lease for deliveries, or even an employee’s personal vehicle that you temporarily rent from them for business use. You have a formal agreement (written or implied) for the use of the vehicle.
• Non-Owned Auto: This primarily refers to vehicles owned by your employees that they use for company business. This is most common when employees use their personal cars for tasks like running errands, attending meetings, or making deliveries on behalf of your company. There isn’t a formal rental or lease agreement between your business and the employee for the specific use of their vehicle for that business purpose.

Why is Hired & Non-Owned Auto Coverage Necessary?

Your business can be held liable for accidents caused by employees or others operating vehicles on your behalf, even if you don’t own those vehicles. Here’s why HNOA coverage is essential:

• Fills Coverage Gaps: While the owner of the vehicle (employee or rental company) likely has their own auto insurance, their policy limits might be insufficient to cover the full extent of damages or injuries resulting from an accident where your business is deemed liable. HNOA coverage acts as an additional layer of protection.
• Protects Your Business Assets: Without HNOA coverage, your business could be directly sued and your assets (cash reserves, equipment, property) could be at risk if an accident involving a hired or non-owned vehicle occurs while on company business.
• Legal Defense Costs: Even if your business isn’t ultimately found liable, defending against a lawsuit can be incredibly expensive. HNOA coverage typically includes coverage for legal defense costs.
• Contractual Requirements: Some contracts may require you to carry HNOA coverage, especially if your employees or rented vehicles will be operating on their premises.

What Does Hired & Non-Owned Auto Coverage Cover?

HNOA coverage primarily provides liability protection. This means it covers:

• Bodily Injury: If an accident caused by someone operating a hired or non-owned vehicle on your business’s behalf results in injury or death to another person, HNOA can help cover the resulting medical expenses, lost wages, and legal costs.
• Property Damage: If such an accident damages someone else’s property (like another vehicle, a building, or a fence), HNOA can help cover the repair or replacement costs.
• Legal Defense: HNOA policies typically cover the costs of defending your business against lawsuits arising from accidents involving hired or non-owned vehicles used for business purposes.

What Does HNOA Typically Not Cover?

HNOA coverage generally doesn’t include:

• Physical Damage to the Hired or Non-Owned Vehicle: HNOA does not cover damage to the vehicle itself. The owner’s insurance (the employee’s personal auto policy or the rental company’s policy) is responsible for that. You might consider a separate Hired Auto Physical Damage policy if you regularly rent or lease vehicles and want coverage for damage to those specific vehicles.
• Injuries to Your Employees: Injuries to your employees while they are driving a hired or non-owned vehicle for work are typically covered under Workers’ Compensation insurance.

Who Needs Hired & Non-Owned Auto Coverage?

Any business that meets one or more of the following criteria should consider HNOA coverage:

• Employees Use Personal Vehicles for Business: Even occasional errands can create liability exposure.
• Renting Vehicles for Business Travel: Short-term or long-term rentals for sales teams, executives, or project staff.
• Leasing Vehicles Without Comprehensive Commercial Auto Policies: If you lease vehicles, but don’t have a full commercial auto policy covering those specific vehicles.
• Borrowing Vehicles for Business Use: Temporary use of vehicles owned by others for company purposes.

Don’t Assume You’re Covered

Many business owners mistakenly believe their Commercial General Liability (CGL) policy will cover auto-related accidents involving non-owned vehicles. However, CGL policies typically exclude coverage for accidents involving motor vehicles. HNOA coverage specifically addresses this gap.

Where Business Meets the Road, Rollo Insurance Is There.

Protecting your business goes beyond the vehicles you own. Whether it’s a team member running an errand in their own car or a rental used for a quick delivery, those everyday moments can carry real risk. That’s why Hired and Non-Owned Auto (HNOA) coverage is an important part of a complete insurance plan.

At Rollo Insurance, we live and work in the same communities you do. We understand the unique needs of local businesses because we’re one too. Our team is here to help you assess your risks and find the right coverage to keep your business protected… no matter whose vehicle you’re using.

Let’s talk. We’ll help you stay covered and keep your business moving forward with confidence.