You most likely already have commercial auto insurance or a business auto policy if you drive company vehicles or use your personal vehicle for work-related purposes (BAP). When someone is in a collision, these insurance can save their lives.
But what if you don't own the company cars that your team employs to get the job done? Will your commercial insurance protect you?
A hired and non-owned auto (HNOA) insurance policy can be useful in this situation. It's time to take into account this special liability-only protection if your company makes use of rental automobiles or permits workers to use their personal vehicles for professional purposes.
Here is all the information you require regarding hired and non-owned auto insurance.
What Is Non-Owned and Hired Car Insurance?
Liability protection for automobiles you've rented, borrowed, or hired for business purposes is provided by hired and non-owned auto insurance. It includes third-party claims, like as harm to someone else's property. But it won't pay for actual physical harm to your work automobile or an employee's car.
If your employee drives their own vehicle to work, it also serves as a backup form of coverage. The other driver will seek to your company to pay for the damages if they are involved in an accident while on the job and their personal auto insurance reaches its liability cap. Thus, it is best to be prepared!
Your insurance provider may permit you to include non-owned auto coverage in your general liability, business owners, or commercial auto policies (BOP). You can also research commercial auto insurance. You just need one insurance to cover the personal, rented, and non-owned vehicles used by your small business because they are so versatile.
What Sets Hired vs. Non-Owned Automobiles Apart?
Vehicles that you rent for your company are known as hired cars. Your employees' personal vehicles that they use on the job are known as non-owned vehicles.
If a third party asserts that one of your rented vehicles or an employee's personal vehicle was the cause of an accident, you are covered by hired and non-owned auto liability coverage as long as the cars or trucks in question were being used for business purposes at the time. Therefore, if you frequently rent vehicles or trucks to transport freight or if one of your employees drives their own vehicle between job sites to transport equipment, you are protected.
Is It Possible to Add Another Insured to My HNOA Policy?
Yes, you can include a different individual or company as an additional insured on your policy to expand your HNOA coverage.
You might want to go over and beyond and urge your employee to include your company on their liability policy if they are utilizing a personal vehicle for work-related purposes. Likewise with subcontractors.
Subcontractors are often covered by general liability insurance if they harm a third party, however their policy may not cover claims relating to automobiles. Your subcontractor may add you as an extra insured under its HNOA coverage if such is the case.
What Does Auto Insurance for Hired and Non-Owned Vehicles Cover?
Accidents in cars don't only happen once. You can be looking at hundreds of dollars in damages after the fact. You can cover these significant costs with the aid of an HNOA policy. Typically, they include:
1) Property damage: If a short-term rental truck you hired to transport equipment to a construction site tips over and damages another automobile on the highway, an HNOA policy can assist cover the cost of the other car's repairs.
2) Your employee was moving pipes to a new worksite when they collided with another car, resulting in physical harm and medical costs. Although the other driver breaks their leg, they are unharmed. Wow, the cost of medical expenses is high. But with HNOA, you won't have to cover all of their medical expenses, including their prescription drugs, physical therapy, and other expenses.
3) Legal fees: You get into a car accident while you're at work, hoping that it may be resolved amicably, but things aren't always that simple. If the driver decides to sue you, HNOA assists you with the cost of settlements and legal fees. It's crucial to keep in mind that hired auto only protects your company in the event of a lawsuit, not your employees. However, they still require their own liability coverage.
What Does Hired and Non-Owned Auto Insurance Not Cover?
The following items are not covered by a rented and non-owned auto policy:
- Your rental vehicles
- Your employees’ vehicles
- Your goods and equipment
- Your injuries or those of your employees
As a result, you still need to rely on other types of company insurance. For instance, HNOA can provide assistance if an injury occurs to a person other than you or your employee, but workers' compensation is required to pay for medical expenses for your employees.
HNOA protects you and your employees from car accidents that occur while commuting to or from work or performing personal errands, even if they happen during business hours. HNOA also covers business activities like depositing company assets at a bank.
Additionally, while though HNOA includes rental cars, this exception does not apply to cars that you have borrowed from others, such as coworkers, business partners, or family members. Additionally, HNOA is only provided for personnel vehicles "on-excess," or when personal auto insurance has been exhausted.
Remember that if you or your staff were careless on the road, you won't be covered. This may apply to one of you:
- driving while impaired
- had a car that wasn't well-maintained
- Was operating a personal vehicle without insurance
If an employee has a problematic driving history, such as a DUI or numerous moving violations, your HNOA insurance can also exclude coverage in an accident.
How Much Does Auto Insurance for Hired and Non-Owned Vehicles Cost?
An HNOA policy costs roughly $100 per year. Your payment amount is determined by things like:
Employee driving records
- Coverage limits and deductibles
- Prior claims from your business
- Type, value, and number of vehicles being insured
- Number of miles driven
You won't have to commit to paying premiums for an entire year because these policies are frequently acquired as six-month policies.
It's possible that your rental agency will provide its own motor liability insurance with comparable protection to an HNOA policy. Since rental vehicle insurance can be significantly more expensive than HNOA insurance coverage, you should compare insurance quotes to make sure you're receiving the best value for your money.
Drive Safely with HNOA Insurance
You frequently travel with your group. You can take steps to reduce your risk of an accident and keep more money in your wallet. You can establish clear driving standards for your team, only allow personnel with a history of safe driving to operate vehicles, and ensure that everyone has a valid driver's license.
To control your own dangers, you still need a particular defense. In the event that you or one of your employees were involved in an automobile accident, HNOA coverage can help reduce your responsibilities if you don't own your vehicles altogether.
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