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Hired and Non-Owned Auto Insurance
Coverage for employees using personal vehicles for work
Hired and non-owned auto insurance helps protect a business when employees use their personal vehicles for work-related driving.
That can include an employee making a bank deposit, picking up supplies, driving to a client meeting, or delivering food or pizza. It can also apply when a business rents or borrows a vehicle for work.
These situations are easy to overlook. The vehicle may belong to the employee, but the business can still be pulled into a claim if the accident happens during a work-related trip.
Concklin Insurance Agency helps business owners review employee driving, rented vehicles, delivery exposure, and how hired and non-owned auto coverage fits into the broader business insurance program.
Hired Auto vs. Non-Owned Auto
Hired and non-owned auto coverage includes two related types of driving.
Hired Auto
Hired auto applies when the business rents, hires, borrows, or temporarily uses a vehicle for work.
Examples may include a rented vehicle for a business trip or a borrowed vehicle used for a short-term business need.
Non-Owned Auto
Non-owned auto applies when someone uses a personal vehicle for work on behalf of the business.
Examples may include employees using their own cars for errands, client visits, supply runs, bank deposits, food delivery, pizza delivery, or other work-related trips.
How This Is Different From Commercial Auto Insurance
Commercial auto insurance is for vehicles the business owns or leases.
Hired and non-owned auto insurance is for personal, rented, or borrowed vehicles used for work.
A business may need both. For example, company vans may be insured under a commercial auto policy, while employee-owned vehicles used for errands, client visits, or deliveries may need hired and non-owned auto coverage.
When This Coverage Should Be Reviewed
Hired and non-owned auto coverage should be reviewed when employees, owners, managers, or other workers drive for the business in a vehicle the business does not own.
Common examples include:
- An employee makes a bank deposit
- An employee picks up supplies
- A manager rents a vehicle for a business trip
- A restaurant employee uses a personal vehicle for food delivery
- A pizza delivery driver uses a personal vehicle
- A business borrows a vehicle for a temporary work need
- A third-party delivery relationship creates questions about liability
The key issue is not who owns the vehicle. The key issue is whether the trip was connected to the business.
What Hired and Non-Owned Auto Insurance Can Help Cover
Hired and non-owned auto coverage is mainly liability protection for the business.
If an employee causes an accident while driving for work, the injured person may file a claim against the employee, the business, or both. This coverage may help protect the business from certain costs tied to the accident, including injury claims, property damage claims, legal defense costs, settlements, or judgments.
Coverage depends on the policy and the facts of the claim.
What This Coverage Does Not Do
Hired and non-owned auto coverage should not be treated as full auto coverage for the employee.
Depending on the policy, it may not:
- Pay for damage to the employee's personal vehicle
- Replace the employee's personal auto insurance
- Cover the employee's injuries
- Cover normal commuting
Employees who use their own vehicles for work should keep their own personal auto insurance. The business should also understand whether that policy allows business use, especially for delivery.
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Food, Pizza, and Third-Party Delivery
Delivery can create larger auto exposure because the driving is frequent and tied directly to the business.
Restaurants should not assume an employee's personal auto policy fully protects the business. Personal auto policies may limit or exclude delivery use, and personal auto limits may be too low for a serious accident.
Third-party delivery services can also create insurance questions. A restaurant may not own the vehicle or employ the driver, but a delivery-related accident can still lead to questions about responsibility, insurance, contracts, and claims.
Frequently Asked Questions
Do I need auto insurance for my business if the business does not own a vehicle?
Yes, you may still need to review auto liability coverage even if your business does not own a vehicle.
If employees, owners, or managers use personal, rented, or borrowed vehicles for business purposes, your business may still have liability exposure after an accident. Hired and non-owned auto coverage helps address that exposure.
What is an example of when my business might need hired and non-owned auto coverage?
Your business may need hired and non-owned auto coverage if employees use personal vehicles for bank deposits, supply runs, client visits, deliveries, jobsite visits, sales calls, errands, or other work-related trips.
It may also be needed if the business rents a vehicle for a conference, event, delivery, temporary project, or business trip.
Is my employee's personal auto insurance enough if they only drive occasionally for work?
Not always.
An employee's personal auto policy may respond first after an accident, but the business can still be brought into a claim if the employee was driving for work. Some personal auto policies may also limit or exclude certain business use.
Hired and non-owned auto coverage helps address the business's liability exposure when employees use personal vehicles for work-related driving.
Does hired and non-owned auto cover damage to my employee's car?
Usually, no.
Hired and non-owned auto coverage is primarily liability coverage for the business. It generally does not pay to repair an employee's personal vehicle after an accident.
Your employees should understand that hired and non-owned auto coverage does not replace the need for them to maintain personal auto coverage.
Do I need hired and non-owned auto if my business uses rented vehicles?
If your business rents vehicles for business trips, deliveries, events, temporary work, or other business purposes, hired auto coverage may help protect the business from certain liability claims.
You should also review whether physical damage coverage is needed for rented vehicles because hired and non-owned auto liability coverage may not cover damage to the rented vehicle itself.
Does hired and non-owned auto cover delivery drivers?
It depends on who is driving, whose vehicle is being used, and how the delivery work is arranged.
If employees use personal vehicles for business deliveries, hired and non-owned auto should be reviewed. If the business owns or leases delivery vehicles, commercial auto is usually the coverage to review.
If your business uses third-party delivery platforms or independent contractors, the insurance questions can be more complicated. Review the contracts, driver responsibilities, platform requirements, and your own policy with your insurance agent.
Do I need hired and non-owned auto if my business uses contractors?
Possibly.
If contractors drive their own vehicles for work connected to your business, you should review the contracts, insurance requirements, and liability exposure.
Hired and non-owned auto may not solve every contractor-related auto exposure, but the situation should be reviewed so you understand who is responsible for insurance and how claims may be handled.
What is the difference between commercial auto and hired and non-owned auto?
Commercial auto coverage is used when the business owns or leases vehicles.
Hired and non-owned auto coverage is used when the business does not own the vehicle but still has auto liability exposure. This may include rented vehicles, borrowed vehicles, or employee-owned vehicles used for business purposes.
If your business owns vehicles, leases vehicles, hires vehicles, or has employees using personal vehicles for work, your agent can help determine which coverage should be reviewed.
Can hired and non-owned auto be added to a business owner's policy?
Sometimes, hired and non-owned auto coverage can be added to a business owner's policy or another commercial insurance policy by endorsement.
Availability depends on the carrier, policy type, business operations, and vehicle use. Your insurance agent can help you review whether it can be added to your existing policy or whether another coverage option is needed.
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