Who pays when an employee crashes their own car on a work errand?

When an employee crashes their own car on a work errand, their personal auto policy pays first - but personal liability limits are often just $50,000 to $100,000 per occurrence, and some personal insurers deny or limit the claim once they learn the vehicle was in business use. Whatever the personal policy does not cover becomes a direct claim against the employer, unless hired and non-owned auto coverage (HNOA) is in place to respond to that gap.

What is hired and non-owned auto coverage?

Hired auto covers vehicles the business rents, leases, or borrows for work: a cargo van rented to move equipment, a sedan leased for a trade show, or a truck borrowed from a vendor. Non-owned auto covers personal vehicles employees use on company business: a sales rep driving to a client site in her own car, an office manager picking up supplies, or a technician heading to a job in his personal truck.

The liability gap behind this exposure is significant. If an employee causes a serious crash while running a business errand in a personal vehicle, the injured party can name the company in a lawsuit. Personal auto liability limits are often $50,000 to $100,000 per occurrence, and some personal insurers deny or limit claims when the vehicle was in business use. Whatever the personal policy does not cover lands on the business.

Which Georgia businesses need HNOA coverage?

Businesses that commonly carry HNOA include:

• Professional services firms whose staff drive to client meetings
• Contractors and trades that send workers to job sites
• Retail and distribution operations making deliveries in personal or rented vehicles
• Nonprofits and healthcare organizations with staff or volunteers driving for the organization
• Any business that reimburses mileage, because reimbursement alone does not transfer liability

How does HNOA coverage work in practice?

For example, a marketing firm in Atlanta sends an employee to deliver materials to a client in her own car. She runs a red light and seriously injures another driver, who incurs $180,000 in medical bills and sues the firm. Her personal policy pays its $50,000 limit. The remaining $130,000 lands on the firm unless HNOA with a $1 million liability limit is in place, which covers the gap.

HNOA does not cover physical damage to the employee's personal vehicle. That stays with the employee's own collision coverage. What it covers is the business's legal liability when that vehicle is involved in an accident during business use.

Can HNOA be added to an existing policy?

The coverage is typically inexpensive relative to the exposure it closes. It can be added to a business owners policy (BOP) or a commercial general liability policy as an endorsement, though exact availability depends on the insurer.

For example, a contractor who carries a BOP but sends crews to job sites in personal trucks can often add HNOA for a modest annual premium, closing a gap that would otherwise expose the business to uncapped liability after an at-fault accident.

What should Georgia business owners check about their current coverage?

Georgia businesses with even one employee who drives for work, even occasionally, commonly carry this coverage. Whether a current policy already includes it or whether a separate endorsement is needed is worth confirming before a claim surfaces. A free coverage review through Olive Cover can check an existing policy for this gap. Learn more about commercial insurance options available in Georgia.