When an employee causes a crash while running a work errand, the injured party can sue the employer too. The employee’s personal auto policy responds first, but its limits may be low. Hired and non-owned auto coverage protects the business itself.
- Hired autos are vehicles the business rents, leases, hires or borrows, but not ones borrowed from employees or partners.
- Non-owned autos are vehicles the business doesn’t own, lease, hire or borrow that are used in its business, which mainly means employees’ personal cars.
On the ISO business auto policy, these are covered-auto symbols 8 (hired) and 9 (non-owned). Symbol 1 (“any auto”) includes both. A business with no owned vehicles can buy HNOA alone, either as a standalone policy or as an endorsement to a BOP or GL policy, where the carrier offers it.
How it shows up in an agency
A marketing agency with 12 employees owns no vehicles, so the owner assumes it doesn’t need auto coverage. But staff drive to client meetings in their own cars and rent cars on trips. The account manager adds HNOA to the BOP. When a contract requires auto liability with “hired and non-owned” or symbol 1, 8 and 9 language, the agency can now confirm it on the certificate.
Common confusion
- It’s liability only. HNOA doesn’t pay to repair the rental car or the employee’s car. Physical damage to hired autos needs separate coverage.
- It doesn’t cover the employee personally. The employee’s own policy covers them. HNOA protects the business.
- Underwriters ask about drivers. Carriers may ask how often employees drive and may check MVRs for regular drivers.
Carriers’ appetites are on our commercial auto page.