Hired Auto and Non-Owned Automobile Liability Coverage
Hired Auto and Non-Owned Auto coverages are usually added as endorsements on a
General Liability policy. These types of coverage meet contract requirements
for Commercial Auto coverage when the company has no vehicles titled in its name.
What is Hired Automobile Coverage?
Hired Auto coverage can either supplement or replace a car rental agency's liability
coverage. But because Hired Auto insurance doesn't cover physical damage to a rented
vehicle, it still makes sense to purchase the rental agency's physical damage coverage.
The Hired Auto policy's liability coverage protects only your company, not the employee
driving the rented vehicle. As such, it supplements the driver's own auto liability
coverage. Just as if he or she were driving a personal vehicle, in the event
of an accident, the employee would still be personally liable for injuries or property
damage to third parties.
Damage to the vehicle you rent is not covered
Because Hired Auto insurance doesn't cover physical damage to a rented vehicle,
it still makes sense to purchase the rental agency's physical damage coverage.
What is Non-Owned Automobile Coverage
Non-Owned Auto coverage protects your company should it be sued due to an
auto accident while one of your employees is on company business in a personal vehicle.
Unlike a personal auto policy, this coverage will not protect you or your employee.
As with Hired Auto coverage, this coverage protects the company only and supplements
the driver's personal auto liability coverage.
Auto liability coverage may be described in your contract in this way:
"Contractor shall carry bodily injury, property damage, and automobile contractual
liability coverage for owned, hired and non-owned autos with a combined single limit
of liability for each accident of not less than $1,000,000."
Why You Need Hired and Non-Owned Automobile Coverage
If an employee of your company has a serious auto accident in their own vehicle
or in a rented vehicle while on company business and their personal insurance is
not enough to cover the claim, your company can be held responsible. These claims
can be catastrophic and the cost of this insurance is usually less than $150 per
year. Every business owner should seriously consider this coverage.