Business Insurance  /  Hired & Non-Owned Auto

Commercial Coverage

Hired & Non-Owned Auto
Insurance — When Employees
Drive Their Own Vehicles for Work.

Your commercial auto covers the vehicles your business owns. The moment an employee drives their own truck, van, or car on a work errand and causes an accident — your business is exposed. Their personal auto policy excludes business use. Your commercial auto doesn’t cover vehicles you don’t own. HNOA fills that gap.

What Hired & Non-Owned Auto Insurance Covers

Liability coverage for your business when vehicles you don’t own are used for business purposes.

Hired and non-owned auto (HNOA) insurance covers your business’s liability when a vehicle your company doesn’t own is involved in an accident during business use. It covers two distinct situations: hired autos — vehicles rented or leased for business purposes — and non-owned autos — personally owned vehicles driven by employees on behalf of the business.

The coverage is liability only. HNOA covers the bodily injury and property damage your business becomes legally responsible for when a non-owned or hired vehicle is used for work and causes an accident. It does not cover physical damage to the vehicle itself — that’s the driver’s own auto policy’s job. What HNOA specifically protects is your business from the third-party liability exposure that arises when employees use their own vehicles for work tasks.

HNOA is typically added as an endorsement to your commercial auto policy or general liability policy at a modest additional premium. For businesses that don’t own any vehicles but have employees or contractors who regularly drive for business purposes, it may be the primary auto-related coverage in the program.

“When your employee drives their own truck to a job site and causes an accident on the way, your business gets named in that lawsuit. Their personal auto policy excludes business use. Your commercial auto only covers your vehicles. HNOA is the only policy that covers your business in that scenario.”

Vicarious liability is the legal principle that makes this exposure real for businesses. When an employee is driving for a work purpose and causes an accident, the employer can be held vicariously liable for the damages — even though they weren’t in the vehicle and don’t own it. HNOA covers that employer liability so it doesn’t come out of the business personally.

What hired & non-owned auto covers:

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Third-party bodily injury
Injuries to other drivers, passengers, or pedestrians caused by an accident involving a non-owned or hired vehicle during business use
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Third-party property damage
Damage to other vehicles or property caused by an accident involving a non-owned or hired vehicle during business use
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Legal defense costs
Attorney fees and court costs to defend your business against liability claims arising from non-owned or hired vehicle accidents
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Hired auto liability
Liability arising from vehicles your business rents or leases — including rental cars used during business travel
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Non-owned auto liability
Liability arising from employee-owned vehicles used for business errands, deliveries, site visits, or any work-related driving
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Employer vicarious liability
Your business’s legal liability as the employer when an employee causes an accident while driving for work purposes

Hired Auto vs. Non-Owned Auto — Two Different Exposures

HNOA covers two distinct situations — here’s exactly what each one means and when it applies.

Hired and non-owned auto are two separate coverage components bundled into one policy. Understanding both helps you see why businesses of almost every type have at least one of these exposures — and most have both.

Hired Auto

Vehicles your business rents, leases, or borrows for business use

Hired auto coverage applies when your business rents a vehicle — a car for a business trip, a van for a delivery, a truck for a job — and that vehicle is involved in an accident during business use. The rental company’s counter insurance is expensive and often inadequate. Your HNOA hired auto coverage provides your business’s liability protection for vehicles you’ve taken control of but don’t own.

Example: A sales manager rents a car for a client visit in another city and causes an accident. The business is named in the resulting injury claim. Hired auto under HNOA covers the business’s liability for the accident.

Non-Owned Auto

Personally owned vehicles driven by employees for business purposes

Non-owned auto coverage applies when an employee or contractor uses their own vehicle — their personal truck, car, or van — for a work-related purpose and causes an accident. The business can be held vicariously liable as the employer. The employee’s personal auto policy typically excludes or limits business use coverage. Non-owned auto under HNOA covers the business’s resulting liability.

Example: A landscaping crew member drives his personal truck to pick up supplies for a job and rear-ends another vehicle on the way back. The business is named in the claim alongside the employee. Non-owned auto covers the business’s liability exposure.

Why Your Other Policies Don’t Cover This

Commercial auto, GL, and the employee’s personal auto each leave the business exposed in different ways.

Commercial Auto

Your commercial auto policy covers vehicles your business owns, leases long-term, or has scheduled on the policy. It does not extend coverage to employee-owned vehicles or short-term rentals. When an employee’s personal vehicle is involved in an accident during a work errand, your commercial auto policy has no response — the vehicle isn’t yours.

Employee’s Personal Auto Policy

Personal auto policies typically exclude or significantly limit business use. An employee using their vehicle for work purposes may find their personal policy denies or limits coverage for that accident. When their policy limits are exhausted or denied, the injured party looks to the employer — your business — to cover the gap.

General Liability

GL policies include an auto exclusion that specifically excludes bodily injury and property damage arising from the use of an auto — whether owned, hired, or borrowed. If the accident involves a vehicle, GL doesn’t respond regardless of who owns it. HNOA is specifically designed to cover the auto liability gap that GL leaves for non-owned and hired vehicles.

The gap in plain terms: If an employee drives their own vehicle for your business and causes an accident — your commercial auto doesn’t cover it, their personal auto may deny it, and your GL explicitly excludes it. HNOA is the only coverage designed for exactly this situation. Without it, your business absorbs the liability with no insurance backstop.

Who Needs Hired & Non-Owned Auto Coverage

Any business where employees or contractors use their own vehicles — or where the business rents vehicles — for work purposes.

The exposure is broader than most business owners realize. If any employee ever drives their own car for a work-related purpose — even occasionally — the business has non-owned auto exposure.

Contractors & Trades

Subcontractors and employees who drive their own trucks to job sites, pick up materials, or haul equipment create non-owned auto exposure for the business on every trip.

Landscaping & Field Services

Crew members who drive their own vehicles to job sites, nurseries, or supply yards on behalf of the business create non-owned auto liability for the employer on every errand.

Businesses Without a Fleet

Companies that own no vehicles but have employees who regularly drive their personal cars for deliveries, client visits, or errands need HNOA as their primary auto liability coverage.

Professional Service Firms

Consultants, accountants, real estate agents, and other professionals who drive to client meetings in their own cars create non-owned auto exposure for the firm every time they make a client call.

Delivery & Courier Operations

Businesses that use contracted or employee-owned vehicles for deliveries have significant non-owned auto exposure on every run.

Sales & Service Teams

Any business with sales staff or service technicians driving their personal vehicles to client locations creates non-owned auto exposure on every trip. The errand doesn’t have to be dramatic to create liability.

Businesses That Rent Vehicles

Businesses that rent vehicles for business travel, trade shows, or job site use need hired auto coverage for that rental period. Counter insurance at the rental desk is not the right answer.

Any Employer Who Reimburses Mileage

If your business reimburses employees for business mileage, you’re acknowledging they drive their own vehicles for work. The liability exposure that accompanies that reimbursement needs to be covered.

Real Scenarios.

HNOA claims that happen to real businesses — and why no other policy in the program would have responded.

01
A subcontractor driving his own truck to a job site causes an accident
A landscaping subcontractor is driving his personal truck to a client’s property when he runs a red light and seriously injures another driver. The injured driver’s attorney names both the subcontractor and the landscaping company. The commercial auto policy doesn’t cover a vehicle not owned by the business. The subcontractor’s personal auto limits are quickly exhausted. HNOA covers the business’s vicarious liability for the remainder of the claim.

03
A rented van used for a delivery causes property damage
A business rents a cargo van for a large delivery. The driver misjudges a tight turn and damages a client’s fence and landscaping. The rental company’s counter insurance covers the van itself — but the business’s liability to the client for the property damage is the business’s problem. Hired auto under HNOA covers the business’s liability for property damage caused while operating a rented vehicle on business.

05
A pool service tech causes an accident driving his own truck on a service route
A pool service technician drives his personal truck on his assigned service route. He causes an accident between stops. The business directed his route and scheduled his service calls — he was clearly working for the employer. The business is named in the claim. The tech’s personal auto policy denies the claim for business use. HNOA covers the employer’s liability as the business that directed the employee’s driving activity.

02
An employee picks up supplies in their personal car and rear-ends someone
A contractor sends an employee to the supply house to pick up materials for a job. On the way back, the employee rear-ends a vehicle at a stoplight, causing injuries. The employee was clearly acting within the scope of their employment. The business is named in the injury claim. Their commercial auto doesn’t cover the employee’s personal vehicle. The employee’s personal auto excludes business use. HNOA covers the employer’s liability in the lawsuit.

04
A sales rep driving to a client meeting causes a serious accident
A sales representative drives her personal car to a client presentation and causes a multi-vehicle accident with significant injuries. The injured parties pursue both the employee personally and the employer. The employer has no commercial auto — they own no vehicles. Without HNOA, the business has no coverage for the employer liability portion of this claim. HNOA is the employer’s only coverage in this scenario.

06
A business without a fleet gets named in an employee’s accident claim
A small consulting firm has no company vehicles — all employees drive their own cars to client sites. An employee causes a significant accident driving to a client meeting. The firm is named in the resulting lawsuit. Because the firm has no commercial auto policy, they assumed there was no auto exposure. Without HNOA, the firm has absolutely no auto liability coverage for this claim.

Why Get Your HNOA Coverage Through McKnight

HNOA is one of the most consistently overlooked coverages in small business programs — and one of the easiest gaps to close.

Hired and non-owned auto is one of the most common gaps we find when reviewing a business’s insurance program. Most business owners have never thought about it — and most agents don’t bring it up — because the exposure isn’t obvious. No vehicles means no auto insurance, right? Wrong. The moment any employee drives for a work purpose in their own vehicle, the auto liability exposure is real regardless of who owns the car.

HNOA is typically inexpensive — often added as an endorsement to an existing commercial auto or GL policy for a few hundred dollars per year. The cost is modest; the exposure it covers is not. A single serious accident involving an employee’s personal vehicle used for business can generate a six-figure claim against the employer with no insurance backstop if HNOA isn’t in place.

We also look at how the business uses vehicles when reviewing any commercial program — asking specifically about employees who drive their own vehicles for deliveries, client visits, errands, or job site travel. If the answer is yes to any of those, HNOA goes into the recommendation. It’s a standard part of building a complete program for any service business, contractor, or employer with field staff.

Gap identified as part of every review
We ask specifically about non-owned vehicle use when reviewing any commercial program — it’s a gap we look for by default.

Added to existing program efficiently
HNOA is typically an endorsement — we add it to your existing commercial auto or GL policy without a full program change.

100+ carriers
We find the right carrier and structure for your HNOA exposure — whether you need it as a standalone or an endorsement.

Real answers when you call
817.277.6166, weekdays 8:30–5pm. A claim involving an employee’s vehicle or coverage questions — we pick up.

FAQ

Hired & non-owned auto questions we hear all the time.

What is hired and non-owned auto insurance?
Hired and non-owned auto (HNOA) insurance covers your business’s liability when a vehicle your company doesn’t own is involved in an accident during business use. Hired auto covers vehicles your business rents or leases for business purposes. Non-owned auto covers personally owned vehicles driven by employees or contractors on behalf of the business. It is liability coverage only — it protects your business from the third-party claims that result from these accidents, not the vehicles themselves.
If my employee causes an accident in their own car, am I liable?
Yes — under the legal doctrine of vicarious liability, an employer can be held liable for the negligent acts of an employee committed within the scope of their employment. If an employee causes an accident while driving for a work purpose — running an errand, making a delivery, traveling to a job site — the injured party can pursue the employer as well as the employee. This exposure exists regardless of who owns the vehicle. HNOA covers the employer’s liability in these situations.
Doesn’t the employee’s own auto insurance cover this?
Not necessarily — and not fully. Personal auto policies typically exclude or limit coverage for business use of the vehicle. An employee regularly using their car for business deliveries or client visits may find their personal policy denies the claim or limits coverage to only personal use scenarios. Even when the employee’s policy does respond, their limits may be quickly exhausted in a serious accident — and the injured party then looks to the employer for the balance. HNOA covers the employer’s share of liability regardless of what the employee’s personal policy does or doesn’t cover.
My business doesn’t own any vehicles — do I still need this?
Yes — in fact, businesses without any owned vehicles often have a greater need for HNOA because they have no commercial auto policy at all. If any employee ever drives their own vehicle for a work purpose — client visits, deliveries, errands, job site travel — the business has non-owned auto exposure with no coverage for it. A business without company vehicles and without HNOA has zero auto liability coverage for any accident involving an employee driving for work. HNOA is especially critical for service businesses, consulting firms, and any employer whose team uses personal vehicles to do the work.
Does HNOA cover damage to the employee’s own vehicle?
No — HNOA is liability coverage only. It covers your business’s liability to third parties — other drivers, pedestrians, property owners — for bodily injury and property damage caused by the accident. It does not cover physical damage to the employee’s own vehicle. That’s the employee’s own auto insurance’s responsibility.
Does HNOA cover subcontractors driving their own vehicles?
It depends on the specific policy language — non-owned auto coverage is typically written for employees, and some policies may not automatically extend to subcontractors. Whether a subcontractor creates vicarious liability for your business depends on the nature of the relationship and how much control you exercise over their work. For businesses that regularly use subcontractors who drive their own vehicles for the business’s work, we review the HNOA policy language specifically and make sure the coverage extends to the relationship structure you actually have.
How much does HNOA coverage cost?
HNOA is typically one of the more affordable commercial coverages — often added as an endorsement to an existing commercial auto or GL policy for a few hundred dollars per year. For businesses without a commercial auto policy that need HNOA as a standalone or as part of a GL endorsement, the cost is still modest relative to the exposure. The premium varies based on the number of employees driving for work, the frequency of business driving, and the nature of the work. We quote it specifically for your operation — in most cases it’s a straightforward and inexpensive addition to an existing program.

Get Started

If employees drive their own vehicles for your business — your program needs to address that exposure.

Call us or request a quote. We’ll identify the right HNOA structure for your business and add it to your program so the gap is closed.

McKnight Insurance Services  ·  Mansfield, TX  ·  Weekdays 8:30am–5pm