Hired and Non-Owned Auto Insurance is coverage that business owners can buy to protect themselves financially from damage caused by vehicles they do not own but use for business purposes.
This coverage protects third-party property damage or bodily injury caused by an auto accident involving someone from your company driving a hired or non-owned vehicle.
HNOA can be purchased separately or as an endorsement to a commercial general liability policy.
What is the difference between hired and non-owned auto coverage?
Consider the following scenario:
You request that your administrative assistant pick up lunch at a nearby restaurant for a crucial business meeting. They lose control of their vehicle on the way back from the restaurant, colliding with a pedestrian and a parked car. Their car insurance has expired.
Could your company be held accountable?
The straightforward answer is yes.
This is why it's critical to understand the various types of auto insurance coverages available and how they apply to your company.
Businesses use vehicles in a variety of ways, such as driving a company-owned delivery van, renting a vehicle for a business trip, or employees driving their own car in the course and scope of their job.
It should be noted that Hired and Non-Owned Auto Coverage does not cover accidents that occur while an employee is commuting to or from work or running personal errands. In most cases, it only covers liability, which means that the insurance does not cover any damage to the hired or non-owned vehicle involved in the accident.
These various usage scenarios are specifically defined in insurance policies and have an impact on coverage.
Classifications of Vehicles
Owned autos - Owned vehicles are those owned by your company and are the easiest to cover.
Hired autos - vehicles that have been rented, borrowed, or hired. For example, if you are on a business trip and rent a car, this is considered a hired vehicle.
Non-owned autos - vehicles that are used in the business by an employee but do not belong to the company. For example, if an employee uses their personal vehicle to run errands, the vehicle is classified as non-owned.
If your company uses hired or non-owned vehicles, you should review your current coverage.
Coverage is available on a secondary basis.
It's also important to remember that with Hired and Non-Owned Auto Coverage insurance, other coverage comes first.
For example, if an employee drove their car to the post office, coverage under their personal auto policy would take precedence. If the employee lacks coverage or the policy limits are insufficient to cover the claim, the HNOA policy would take effect.
Hired and non-owned vehicle insurance for tech consultants
Many contracts for tech consultants include a requirement for proof of adequate auto insurance, including coverage for hired and non-owned vehicles.
Consider whether your company has hired or non-owned auto exposures as you consider your business. Do your employees ever drive their own cars to work? Is anyone in the company renting cars for business trips? Do you ever need to rent a vehicle to make a customer delivery?
When it comes to insuring your consulting business, there are numerous factors to consider. Many of our clients are often surprised at how inexpensively they can obtain the coverage they require to protect their personal assets. Contact us today so we can help you determine whether the coverages you currently have are adequate.