Hired and Non-Owned Auto

What is hired and non-owned auto coverage?

Hired and non-owned auto coverage is an extension of commercial auto insurance that covers vehicles your business uses but does not own. It splits into two parts: hired auto (vehicles the business rents, leases, hires, or borrows for business use) and non-owned auto (vehicles owned by employees or contractors that are used for business purposes). This coverage is distinct from a standard commercial auto policy, which applies only to vehicles the business actually owns.

When does hired and non-owned auto coverage apply?

For example, an employee who runs an errand for the business in their personal car and has an accident may find their personal auto policy responds first, but if the damages exceed their personal limits, the business can be sued as the employer. Hired and non-owned auto coverage protects the business in that scenario, filling the gap between what the employee’s personal policy pays and what the injured party recovers from the business. Georgia courts follow a vicarious liability standard, meaning a business can be held responsible for the negligent acts of an employee acting within the scope of their employment, even when the employer never touched the vehicle. A delivery run, a trip to a client’s office, or picking up supplies for a job site can all qualify as business use under Georgia law. Our FAQ on Georgia auto minimum limits explains how low personal policy limits can leave a gap that reaches the employer.

What types of businesses need hired and non-owned auto coverage?

Any business where employees drive their personal vehicles for business purposes carries this exposure. Service businesses, professional services firms with off-site client visits, construction subcontractors using personal trucks, real estate agents driving between showings, and home-based businesses where the owner drives for anything business-related all face the same underlying risk. Even a one-person operation that occasionally rents a cargo van to move equipment has hired auto exposure. Many small businesses add this coverage as an endorsement to their business owners policy. Our guide on which businesses qualify for a BOP explains how hired and non-owned auto fits into a broader commercial insurance package.

Does hired and non-owned auto cover rental vehicles used for business?

Rented vehicles are a specific gap worth understanding. Most commercial auto policies do not automatically cover short-term rentals used for business. A hired auto endorsement closes that gap and typically costs far less than declining coverage at the rental counter on every trip. For example, a consulting firm whose team members rent cars for client visits can cover all those rentals under a single hired auto endorsement rather than purchasing rental counter coverage each time. Our FAQ on BOP cost vs. separate policies in Georgia discusses how endorsements like this affect overall commercial insurance cost.

How is hired and non-owned auto coverage typically sold?

Hired and non-owned auto is typically sold as an endorsement on a commercial general liability coverage policy or a business owners policy, with a modest premium increase, often in the range of one hundred to three hundred dollars per year. It is also available as a standalone policy for businesses without commercial auto exposure beyond hired and non-owned vehicles. The declarations page of your current commercial policy will show whether this endorsement is already included. A coverage review can confirm whether your current policy includes hired and non-owned protection and identify any gaps based on how your employees actually use their vehicles for your business.