Non-owned auto coverage and hired auto coverage both provide coverage for you and your business in the event an employee is involved in an accident while working on your clock. But the similarities stop here. These different policies offer very different types of coverage, and it is important to understand each to ensure you find the policy that is right for you.
On one hand, non-owned auto coverage protects your company if sued as a result of an auto accident that you or one of your employees has in a personal vehicle while on company business. On the other hand, hired auto coverage provides your business with liability insurance for vehicles that you rent on a short-term basis for business purposes.
These coverage options should be considered if your company rents cars or vans for business purposes (including travel to conferences, visiting clients, etc.) or if employees use their personal vehicles to run company errands.
Hired auto liability will pay for damages to a third party if you or one of your employees causes an accident or injury to someone while driving a rented vehicle for business purposes. For instance, if you rent a vehicle to drive employees to a conference or to visit a client and cause an accident during the trip, the person you hit will undoubtedly look to your company to pay for damages. Without this coverage, your company will have no insurance for the rented vehicle.
The same applies if you have an employee run an errand or visit a client in his or her personal car. If the employee causes an accident, the injured party will look to your company to pay damages since the employee was using the car on company business.
Both of these coverages are usually added to a general liability policy. When there are no vehicles titled in the company name, this additional coverage will serve to meet the contract requirement for commercial auto coverage in most states.
Hired auto coverage replaces or augments the liability coverage offered by auto rental agencies. However, the vehicle must be rented in the company’s name. This does not replace the physical damage coverage that applies to damage caused to the vehicle rented by your company.
Non-owned auto coverage protects your company in the event it is sued as a result of an employee accident, but it will not protect you or your employee personally. Only your personal auto insurance policy can do that.
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