Understanding Hired and Non-Owned Automotive Liability Insurance

Most business owners know their company vehicles need to be insured, but what if your employees use personal vehicles for work purposes? What if you rent vehicles for your business? In these cases, you need hired & non owned auto liability insurance.

What Is Hired and Non-Owned Insurance?

Hired & non-owned auto liability pays for damages if an employee has an accident while driving a rented or personal vehicle for business purposes.

Standard automotive liability covers damages when the accident involves a company vehicle. Some business owners mistakenly assume that when an employee drives a personal vehicle for work, the employee’s personal auto insurance will cover damages. However, this is not true.

Fortunately, you can purchase insurance for these situations. For example, if you own a pizzeria and your delivery drivers use their own vehicles, you need hired & non-owned auto liability coverage. If a driver rear-ends someone while making a delivery, your insurance will cover it.

Does It Cover Damages to the Vehicle?

This insurance covers liability only; it won’t cover damages to the rented or employee-owned vehicle. When renting a vehicle for company use, you can purchase insurance from the rental company. You can also add an endorsement to your policy to cover damage to a rented vehicle.

It’s always stressful when a work-related accident occurs. As a business owner, you should understand your insurance options so you can be prepared in the event of an accident.

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