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R&R Insurance Blog

Defining Hired and Non-Owned Auto Liability

Posted by Michele Janquart

health-care-brokerHired and Non-Owned Liability coverage creates special concerns for businesses. The Hired Auto Liability coverage applies in a situation where a business owner or any other person with the business owner’s permission uses a “hired” auto in the course of business. A hired auto means any auto you lease, hire, borrow or rent.


Non-Owned Auto Liability coverage applies in cases involving employees driving their own vehicles on business for their employer. Non-Owned Liability refers to autos the business does not own, lease or hire. Some scenarios where Non-Owned Auto Liability applies are food or other types of delivery, or an employee running errands for their employer. The coverage protects the employer’s interest and is excess coverage for the employer. The employee must have their own auto coverage, which will apply first to a claim.


Some businesses use drivers on bicycles or golf carts to deliver food or other products. Since bicycles and golf carts are not licensed for road use, they do not fall under the Business Auto’s Non-Owned Liability coverage. If the driver causes an injury or property damage, any coverage that may apply will be picked up by the General Liability policy.


Regarding Non-Owned Auto Liability employers should have procedures in place to verify that employees have their own coverage in force. Driving records should be checked periodically and confirmed that they meet the insurance companies requirements.


Many insurance companies offer the coverage and limits greater than $1,000,000 are available from some insurers. Contact a Knowledge Broker at R&R Insurance for additional information.

Topics: Business Insurance