What Is Hired and Non-Owned Auto Coverage?

Businesses face various risks, especially concerning vehicles not directly owned by the company. Specialized insurance coverage is crucial to address liabilities that can arise from such arrangements.

Defining Hired and Non-Owned Auto

Hired and Non-Owned Auto coverage addresses two distinct categories of vehicles used for business. “Hired Auto” refers to vehicles a business rents, leases, or borrows for its operational needs. Examples include a rental car for an employee’s business trip, a short-term leased van for delivery, or a vehicle borrowed for a specific task.

Conversely, “Non-Owned Auto” pertains to vehicles not titled in the business’s name but used on its behalf. This includes an employee using their personal vehicle for a client meeting, bank deposit, or picking up supplies. It also extends to vehicles owned by independent contractors or volunteers performing services for the business.

Applicability of Hired and Non-Owned Auto Coverage

Businesses need Hired and Non-Owned Auto coverage when operations extend beyond company-owned vehicles. This is relevant for businesses with employees who regularly use personal cars for company errands, sales calls, or deliveries. Without this coverage, a significant liability gap can exist, as standard commercial auto policies only protect vehicles listed on the policy and owned by the business.

Businesses that frequently rent vehicles for travel or temporary projects face similar exposures. While rental car agencies offer their own insurance, this generally covers physical damage to the rented vehicle, not the business’s broader liability. Personal auto policies often exclude incidents occurring while a vehicle is used for business, leaving the business vulnerable to accident claims.

What Hired and Non-Owned Auto Coverage Protects

Hired and Non-Owned Auto coverage primarily protects the business from liability claims stemming from accidents involving vehicles it does not own or lease long-term. This includes coverage for bodily injury and property damage that a third party sustains as a result of an accident. For example, if an employee using their personal car for a business delivery causes an accident, this coverage would help protect the business from claims for medical expenses of injured parties or repairs to damaged property.

The coverage typically extends the liability protection of a general liability policy or a commercial auto policy to these specific non-owned or hired vehicle scenarios. It is important to note that this coverage is generally focused on the business’s liability to others, not on the physical damage to the hired or non-owned vehicle itself. For instance, it would not cover the cost to repair an employee’s personal car if it is damaged in an accident while on company business. Similarly, it usually does not cover injuries sustained by the driver of the hired or non-owned vehicle.

References

1. The Hartford. “Hired and Non-Owned Auto Insurance.” Accessed August 21, 2025.