What Is Hired & Non-Owned Auto Insurance?
Hired and Non-Owned Auto Insurance provides liability coverage for bodily injuries or property damage that you or your employees cause while driving for work. This protection applies to vehicles you “hire” (like a rental car) or vehicles your business doesn’t own (like employees' personal vehicles). You can usually add this coverage as endorsement to your General Liability Insurance.
Note: Hired and Non-Owned Auto coverage does not pay for collision damage. You’ll still require a separate policy for that. This policy is strictly for liability associated with accidents – so if someone involved sues you claiming you were negligent.
Hired Auto coverage can help fill the gap in your personal auto liability insurance for work driving (note: personal policies tend to exclude this activity). It can even take the place of the liability coverage you may need for a rental car. It’s important to know that Hired Auto coverage can address your company's liability, but it doesn’t offer liability protection for the person driving the car. Whoever was behind the wheel may be personally liable for third-party injuries or property damage.
Non-Owned Auto coverage can help pay for legal expenses if your business is sued over a car accident you or your employees caused while driving a personal vehicle for business errands. Just like Hired Auto, it only covers the company’s liability, and its role is to fill the gap in personal auto liability coverage, which doesn't cover business driving. Keep in mind that whoever was driving can still be held personally liable for any damage or injuries they cause.
Hired and Non-Owned Auto Insurance in Action
So what could lead to a Non-Owned Auto Insurance claim?
“The biggest instance that I’ve seen is where you have an employee who is running an errand and is involved in a car accident,” says Guy DiMartino (@gsdimartino), attorney at http://www.gsdimartino.com/ . “Every state has its own laws regarding that issue, but generally speaking, if you are in the course and scope of employment and you are negligent, the employer is responsible vicariously.”
This means if your employees use their own vehicles to travel to your clients’ offices or pick up the company mail from the post office and they get into an accident, your business could be held liable.
Now what about Hired Automobile Insurance coverage?
Let’s say you fly to Austin for the NGINX conference to sharpen your app-building skills, and you rent a car at the airport. On your way to your hotel, you cause an accident that sends a family of six to the hospital with serious injuries. In either case, your Hired Auto Insurance can help cover the cost of the subsequent lawsuit against your business.