Many business insurance policies include an often misunderstood coverage: hired and non-owned auto liability. This coverage may be part of your BOP or general liability coverage. Or, it may be included as part of your commercial auto insurance (often represented by coverage symbol 8 & 9). But what exactly is hired and non-owned auto liability? And, most importantly, why should every business owner consider purchasing this coverage?
First, let’s examine what hired and non-owned liability actually covers. Many insurance agents often refer to hired and non-owned auto liability in singular terms. In reality, there are two types of coverage offered: liability arising from the use of hired autos and liability arising from non-owned autos being used for the benefit of your business. It is important to understand the distinction because the two coverages are not always included together. Some policies may provide coverage only for non-owned autos, or only for hired autos. Your business likely needs coverage for both hired and non-owned autos.
Hired Auto Coverage
Hired auto is a funny term the insurance industry uses to describe a vehicle that is rented, hired or borrowed by the business. For example, if you have an employee that rents a vehicle while on a business trip, that is a hired auto exposure. If you occasionally rent a truck to move materials or merchandise, that also is a hired auto.
Non-Owned Auto Coverage
A non-owned auto is not rented, hired or borrowed by the business. But, it is being used for the purpose and benefit of the business. For example, if your employees occasionally use their personal vehicles to run errands or make sales calls, you have a non-owned auto exposure.
Hired and non-owned auto liability is usually provided to a business that does not own any vehicles. When provided on a general liability or BOP policy, it is intended to cover an incidental or infrequent exposure. When provided on a commercial auto policy, the coverage can be expanded to cover a business with significant hired and non-owned auto liability exposure.
Business owners commonly underestimate or are unaware of, the potential liability to their business from hired or non-owned autos. It is important to understand you, as the business owner, are vicariously liable for the activities of your employees. This is true whether they are sitting at a desk, on a job site, or behind the wheel of an owned or non-owned vehicle.
Get a Quote for Hired & Non-Owned Auto Liability
Hired and non-owned auto liability can protect your business and, best of all, it is extremely affordable. Many times the coverage can be added to your business insurance for around $100 per year. Take a look at your current business insurance or commercial auto insurance policy. Does it include hired and non-owned auto liability? If not, it is time for a policy review. Contact the business insurance experts at Safeguard Insurance today for a no-obligation quote.