Policy Types & Coverage

Hired & Non-Owned Auto Insurance

Hired and non-owned auto (HNOA) insurance provides liability coverage for a business when its employees drive vehicles the company does not own. "Hired auto" refers to vehicles the business rents or leases on a short-term basis — rental cars for business trips, for example. "Non-owned auto" refers to employees' personal vehicles used for business purposes — driving to a client meeting, picking up office supplies, or making deliveries in their own car. HNOA fills the gap between personal auto insurance and a full commercial auto policy for businesses that don't own a fleet but still have driving exposure.

Why HNOA Matters for Independent Agents

Hired and non-owned auto is one of the most overlooked coverages in commercial insurance, yet virtually every business with employees has the exposure. If a salesperson drives their personal car to a client lunch and causes an accident, the injured party can sue both the employee and the employer. The employee's personal auto policy covers the employee, but the business itself has no auto liability coverage unless it has purchased HNOA or a commercial auto policy.

This gap catches agents off guard because many assume the business's general liability policy covers auto accidents. It does not. The ISO CGL policy contains an absolute auto exclusion (Exclusion g) that eliminates coverage for any bodily injury or property damage arising out of the use of an automobile. That means a $2 million GL policy provides zero protection when an employee causes a car accident while running a work errand.

For agents, HNOA is a straightforward cross-sell that protects the client and demonstrates thoroughness. The conversation is simple: "Do any of your employees ever drive their personal cars for work purposes? Do you ever rent vehicles for business?" If the answer to either question is yes, the client needs HNOA. This applies to consulting firms, accounting practices, real estate agencies, marketing companies, nonprofits — essentially any business where employees occasionally drive for work but the company doesn't own vehicles.

How HNOA Works

HNOA coverage can be obtained in two ways:

HNOA provides liability coverage only — it does not cover physical damage to the hired or non-owned vehicle itself. If an employee wrecks a rental car while on a business trip, HNOA pays for injuries and property damage to the other party, but the damage to the rental car is covered by the rental company's insurance, the employee's personal auto policy, or a collision damage waiver purchased at the rental counter.

Coverage limits for HNOA typically mirror the business's commercial auto or GL limits — commonly $1 million combined single limit (CSL) for bodily injury and property damage per accident. The premium for HNOA is remarkably affordable — when added as an endorsement to a BOP or GL policy, the cost is often just a few hundred dollars per year for a small professional services firm, making it one of the best-value coverages in commercial insurance.

Carriers underwrite HNOA based on the number of employees, the nature of the business, estimated annual mileage for business purposes, and whether employees are required to maintain minimum personal auto liability limits. Some carriers require that businesses with HNOA implement a motor vehicle record (MVR) checking policy for employees who drive for work, ensuring that employees with poor driving records are excluded from work-related driving.

A critical point for agents: HNOA is commonly required by contracts and leases. Commercial landlords, general contractors, and corporate clients frequently require proof of hired and non-owned auto coverage in addition to GL and umbrella. A consulting firm bidding on a project with a Fortune 500 company will almost certainly need HNOA shown on their certificate of insurance. Not having it can cost the client a contract.

When quoting HNOA, agents need to gather the total employee count, whether the business rents vehicles regularly, the estimated frequency of employee personal vehicle use for business, and any prior auto claims involving employees on business duties. For most small commercial carriers, this information is captured within the standard commercial auto application or as a supplemental question set on the BOP application.

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