Here at TechInsurance, we talk to a lot of independent computer programmers, designers, network administrators, and other IT professionals as we help them find the policies that protect their business revenue. And one conversation we have over and over again is about why Hired and Non-Owned Auto Insurance matters for IT contractors.
Don't get me wrong: we're always happy to explain the importance of HNOA Insurance to our customers. But because the subject comes up so often on the phone, I thought it was worthwhile to dedicate a blog post to the subject.
What Is Hired & Non-Owned Auto Insurance?
First, the basics: HNOA Insurance is a policy that provides coverage for any vehicle you drive for work purposes that isn't owned by your company. That might include a car you rent while you're traveling, your personal car that you use to run business errands or to go to clients' premises, or a car one of your employees owns and uses for company missions.
Let me guess: you're wondering why you'd need extra insurance beyond the rental or personal auto policies already in force.
Great question. Consider the scenario below.
How a Car Accident Can Cost You Thousands… Even if You Have Personal Auto Insurance
Imagine this: you own and fully insure your car. You drive safely and you have robust protection so that, even if you're in an accident, you know you'll receive enough money to repair your vehicle and (though you hope it won't happen) pay medical bills if you're injured.
Great. Your Personal Auto Insurance policy should work perfectly, as long as you're driving to do things for your non-business life.
But then this happens: you're driving from your house to a client's offices for a routine check-in. You've got your business laptop in the car, along with materials you plan to use for a presentation. It's raining and the roads are slick. You drive slowly (you left plenty of time), but as you're crossing an intersection, a truck barrels through a red light and jackknifes you. You're mostly okay (phew), but your car is totaled - but you're not worried because you know your Personal Auto Insurance will cover the cost of purchasing a new car, right?
Insurance companies are sticklers for fine print, and if your Personal Auto policy stipulates that you're only covered for personal use of the vehicle, your claim might be denied.
Put another way: if your car is registered to you as an individual and you're using it in your capacity as business owner, accidents that happen might not be covered. Which means you'll have to tap into your business funds or your personal savings account to buy a new car.
How HNOA Insurance Can Protect Your Assets
If you're like most IT contractors or small-business owners, your business is probably not big enough to warrant purchasing and registering cars in its name. So you don't need a traditional Commercial Auto Insurance policy. But if you or your employees regularly use personal or rented vehicles for business purposes (including running errands, transporting clients, and traveling to and from client offices), you should consider purchasing a Hired and Non-Owned Auto Insurance policy.
Of course, certain situations don't merit HNOA coverage. If you're only using your car to drive to and from the office, you're fine: after all, people who work in larger companies can rely on their Personal Auto Insurance for accidents that happen en route to work. But if you do more driving than that for work in your own car (or your employees do), be sure to ask your insurance agent about whether you need HNOA coverage.
Writtten by Brenna Lemieux - check her out at Google+ or Twitter