Commercial Insurance Hired and Non-Owned Auto Liability

If you’re a small business owner or run a non-profit, did you know you could be sued if an employee or volunteer is involved in an accident while driving their own car or a rented vehicle on business? Unfortunately, it’s true and there is an option that may be added to your commercial insurance policy or purchased separately, if it can’t be added to your general liability insurance, to protect you in such an event. It’s referred to as hired and non-owned auto liability, or HNO liability, and it could save your bacon financially.

Let’s suppose that you send an employee or a volunteer out to pick up office supplies, lunch, coffee, set up a trade show booth, or deliver something to a client or donor. The employee or volunteer looks down at their phone and is involved in an accident. The person they hit is hurt and the employee or volunteer’s car insurance doesn’t cover the victim adequately, then the victim may decide to sue your company or non-profit. Without this coverage, you’d have to pay for defense cost and possibly the liability claim out of your own pocket. That’s where hired and non-owned auto steps in.

A good HNO auto liability policy will provide coverage for at least three things including liability claims, defense costs, and actions of your employee, temporary staff, or volunteer.

  • Liability Claims provides protection for liability claims to your business or non-profit if an employee or volunteer is involved in an accident when driving their vehicle or a rented vehicle for business purposes.
  • Defense Costs enables the insurance company to appoint an attorney to defend your business or non-profit in a lawsuit, even a frivolous or groundless one. That beats having to pay for one out of pocket!
  • Employee / Staff Actions protects your business or organization to the extent it is liable for an employee’s (full time or part time) or volunteer’s actions when driving their personal or a rented vehicle.

It’s also important to note what most HNO auto liability policies don’t cover.

  • The Employee is not covered when driving a vehicle by the HNO policy; it’s for your company or organization.
  • Physical Damage to the employee’s or volunteer’s vehicle is also not covered. That’s covered by their car insurance policy.
  • Transportation of Property such as a company laptop, tradeshow booth, or other organizational property is not covered if damaged while being transported.

Is your business or non-profit covered? To find out if this is included by your commercial insurance policy, ask your agent. It’s much better to find out before an accident happens than after one when it’s too late. Do you have a question, comment, or experience you’d like to share? You can share them with me on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

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