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Non-Owned and Hired Auto Coverage: What You Need to Know

Insuring one or more vehicles owned by your business is a fairly straightforward proposition. But the waters can get a little murkier when employees are using their own vehicles for business purposes, raising additional liabilities. Here’s a brief overview to help you understand non-owned and hired automobile liability coverage.

First, when might you be accountable for the actions of your employees when they’re driving their own vehicles? A few examples:

  • An administrative employee uses their own vehicle to go to the post office or bank on company business
  • An employee is sent to the airport to pick up a visiting client
  • An employee rents a car while traveling for business
  • You provide a vehicle allowance to your sales team for use of their personal cars

Any of those situations, and more, could present a liability exposure if the employee has an accident. A basic business auto policy covers only company-owned vehicles, which is why you’ll need non-owned and hired liability insurance.

Understand that an employee’s personal automotive coverage will provide primary coverage for both the employee and the business in these situations. The potential issue arises when the employee’s policy limit is inadequate. Then the company can be left responsible for the balance of a large exposure.

Non-owned and hired automobile coverage provides liability protection for your business when your team members use their own vehicles, even if only occasionally. It also provides liability protection for rented or borrowed vehicles, hence the word ‘hired’ in the name.

If your employees ever use their own vehicles for company purposes, or if they rent cars for work, you need non-owned and hired automobile coverage.

Questions about non-owned and hired automobile coverage? Contact Consolidated Insurance.

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