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Hired and Non-Hired Auto Insurance

Does your business have potential automobile loss exposure? In either case, the employer can potentially be held responsible for liability associated with operating a vehicle that has any reference to company business. The employee may carry their own coverage, but in most cases it will be inadequate to cover all damages incurred during the accident.

Hired and Non-Hired Auto Insurance covers bodily injury and property damage caused by an automobile for your hire on non-owned vehicles.  It will not pay for physical damage to the vehicle of the owner itself, but coverage it offers is vital to a business owner.  Many companies forget that their business has an additional exposure to a loss that arises from employees or others using hired or non-owned vehicles for company business.

Non-owned is the use of a personal vehicle owned by an employee, volunteer or anyone besides the insured doing company hours while doing company related business.  It applies to bodily injury or property damages arising from use of person other than the owner providers and receivers are all considered non-owned automobiles.

Non-Hired Auto Reportage

Non-hired auto reportage protects your company in the event that it is sued as a result of a calamity that you or one of your employees has in a personal vehicle. This coverage is used to provide protection for automobiles used in your business.  It is a liability used for your vehicles that are used for automobiles that are not owned, hired, rented or borrowed by your business.  This will also include employees and subcontractors.

Example 1

One of your employees is on their way to an appointment and uses her own car.  On the way there she rear ends another driver and she is at fault.  It does not matter that Susan is a great person with a good sense of humor. It doesn’t even matter that she has full coverage. There is a pretty good chance that the driver that she hit will drag your business into a serious lawsuit.  One thing is for certain if your worker has low coverage you will likely be sued.

Example 2

In the second example you own a XYZ company and you each take turns dropping off bank deposits.  Lou is pulling out of drive thru from federal savings and loans and knocks the front bumper off of Mr. Jones’ BMW.  Lou has a good driving record and everyone at church likes her and she also has a high coverage in insurance.  Sorry, it doesn’t matter you will still be dragged into court litigations.

Even if your company is not legally responsible for the claim someone makes against you it can be quite expensive to defend yourself against such proceedings.  So you see how important this insurance is?  Non-owned auto liability will provide a smooth transition and act as good source of protection for your business.  Your employees are a big part of your business while they are driving for your company they can put your company at risk.

Hired Auto Coverage

Hired auto coverage replaces the liability coverage offered by auto rental agencies. However the vehicle must be rented in your company’s name and this does not replace the physical damage coverage that applies to any damage handling from the rental agency.  Hired auto is the antonym of non-hired or non-owned. This description also refers to borrowed vehicles also.  Remember this is answerability coverage and not for the damage of the vehicle occurred during the accident.


Larry is an administrative assistant for ABC Roofing and Renovations.  At the request of the owner he is asked to rent a twenty-seven foot truck and uses it to pick up sheet metal.  While returning back to the job site he accidentally injures and kills an expressway construction worker.  Witnesses call 911 and says Larry was speeding an ignored the slow driving zones.  The family of the worker will sue ABC Roofing for negligence.  This claims can be catastrophic and the cost of this insurance is usually a reasonable cost. This loss will go well beyond the coverage of a business owner’s policy and any umbrella coverage.

Why Get Hired and Non-Hired Auto Insurance?

If an employee has an accident under any of these situations, your business can be held accountable and sued for damages.  This is your best protection and will kick in of there is a need for it.  A good commercial agent knows that not only do their clients need this coverage. but lack of it will create a massive loss down the line.  Typically, an employee’s personal automobile insurance will provide primary insurance to both the employee and the business if the employee is using their own vehicle on company business.  However, there is a huge chance that the charges will exceed the limit and will be passed on to the company.

Whether you realize it or not there will be an occasion where you find yourself needing an added comfort. This insurance is designed to help you in the aftermath of an ordeal in which your company will be found at fault needing the resources of the coverage that can only be found through hired and non-hired auto coverage. Click here to get a quote on hired and non-hired auto insurance.

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Written by: John Brown
John has more than 25 years of experience in the insurance industry. He grew from a star insurance producer to owning one of the largest agencies in the country; he's a reference regarding contractor's insurance, commercial insurance, and builders' risk insurance.