Hired and non-owned auto coverage, and why small businesses need it
The cheapest coverage on a commercial policy, protecting you when employees drive rented or personal vehicles for work.
Hired and non-owned auto coverage protects your business when a vehicle it does not own is used for business. It costs very little and it closes one of the most common gaps we see in South Texas businesses.
What each part covers
- Hired auto: vehicles the business rents, leases or borrows. The rental truck for a delivery, the car rented for a trade show in San Antonio
- Non-owned auto: employee vehicles used for business errands. The office manager picking up supplies, a salesperson driving to a customer site, an employee dropping the deposit at the bank
Why the employee's own insurance is not enough
It is primary, and it is usually a personal policy with modest limits. If your employee causes a serious accident while on a business errand, the injured party will pursue the employee's policy first and your business second, because the business had the benefit of the trip. Your general liability policy does not cover auto claims. Without non-owned auto coverage, the business is exposed directly.
Who needs it most
- Any business with employees who run errands, make deliveries or visit customers
- Businesses that rent trucks seasonally
- Contractors whose crews sometimes take their own trucks to a job
- Businesses with no owned vehicles at all, which is exactly the group that assumes they need no auto policy
What it does not do
It does not cover physical damage to the employee's own car. That stays with their policy. Hired auto physical damage can be added for rented vehicles, and it is worth having if you rent trucks with any regularity, because rental companies pursue damage aggressively.
Practical controls to pair with it
- Require proof of personal insurance annually from any employee who drives for work
- Check motor vehicle records before allowing business driving
- Have a written policy about phone use and personal passengers during business trips
- Reimburse mileage, which documents the business use and keeps records straight
It is inexpensive
On most small business policies this is one of the least expensive items on the page. Call (956) 687-3334 and ask us to price it on your renewal. Se habla español.
Common follow-up questions
We have no company vehicles. Do we still need it?
Often yes. If any employee ever drives for business, including a supply run, the exposure exists.
Does it cover the owner's personal car?
Coverage for vehicles owned by the named insured or by household members is typically excluded, which is why owners' vehicles are usually scheduled directly.
Is this the same as a rental car waiver?
No. The waiver at the counter covers the rental company's vehicle. Hired auto liability covers the harm you cause to others while driving it.
Want this looked at properly?
We are an independent agency in McAllen serving Hidalgo, Cameron and Starr counties. No cost to talk it through.
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