Why do you need Hired and Non-Owned Auto Insurance?

When your employees use personal vehicles or hired (rented) vehicles, a typical personall auto insurance policy won’t cover any damage caused by an accident in those vehicles as it would be related to business use. In order to have coverage for the company for liability claims and defense costs that arise from accidents involving employees or contractors personal and hired vehicles, you need Hired & Non Owned Auto Insurance to protect you, your employees and your vehicles.

Frequency

If an employee uses a personal vehicle to run a business errand, most people assume their personal auto insurance policy will cover an accident. The personal policy will cover damage to the vehicle as long as business use isn’t exlcuded, but it will not protect the business if the claimant sues.

Limits of Personal Auto

Limits on a personal auto policy are usually pretty small compared to a commercial auto policy. Those limits can be exhausted quite quickly, leaving your business exposed.

Vicarious Liability

If hired vehicles are essential to your operations you will need hnoa to cover property damage and bodily injury claims that occur during the time an auto was in use.

HNOA provides protection for vehicles that have been hired by a company for reasons related to business and for vehicles that are used by the company but not owned by the company.

What is Hired and Non-Owned Auto Insurance?

Hired and non-owned auto insurance is designed specifically for the cases where employees use personal or rented vehicles. It covers liability and medical payments for vehicles that you hire (rented vehicles) or borrow (personal vehicles of employees that is used for business purposes). An important note, this coverage does not cover accidents that happen during an employees’ commute time or if they run a personal errand. The coverage is strictly for business use and purposes. 

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What does Hired and Non-Owned Auto Insurance cover?

You will have to consult your policy documents to confirm exactly what coverage your Hired and Non-Owned Auto insurance provides but here are a few scenarios that typically would and would not be covered. You can read more about what Hired and Non-Owned Auto insurance covers here.

LIABILITY CLAIM
For property damage or bodily injury.
DEFENSE COSTS
Covers the actions of full time, temporary, and volunteer staff.
ATTORNEY FEES
Fees associated with any legal services.
SETTLEMENTS/JUDGEMENTS
Intended to resolve a claim.
OTHER COURT COSTS
If the business is sued as a result of an accident.

How much does Hired and Non-Owned Auto Insurance cost?

As with most commercial insurance policies the cost of HNOA insurance depends on a number of factors. Here are some of the main points that insurance carriers will take into account when calculating your premium:

  1. Hired: Cost of hire.
  2. Non-owned: Number of employees and location.
  3. Miles driven
  4. Radius of driving
  5. Frequency of driving

Who needs Hired and Non-Owned Auto Insurance?

Any situation where an employee or an executive or anyone who works for a company uses a rental car, personal car, or a car not registered to the business, will require an HNOA policy to protect the business properly. 

Below are a few examples of situations where HNOA would be needed and used:

  • A company hiring a limo to drive a board member from the airport to the office 
  • An employee running to a nearby store to pick up office supplies using his personal car
  • An employee offering to use her car to deliver important paperwork to a customer 
  • CEO using his personal vehicle to drive to a board meeting 
  • A construction worker running to Home Depot to pick up some additional tools he needs

However Hired and Non-Owned Auto Insurance is particularly important for the following industries:

On Demand Services

Manufacturing

B2B Services

Software as a Services

Biotech/Healthtech

Consultancies

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