Many business owners either have this coverage and are not sure what it covers or do not have a business auto policy and believe they don’t need it. This is a very important coverage that ALL businesses should have on their business policy whether they have business vehicles or not.
The term hired and non owned coverage can be a bit confusing so the basic definition is that it covers bodily injury and property damage caused by a vehicle the business hires, including rented or borrowed vehicles by the business, or caused by non owned vehicles or vehicles owned by others or your employees.
For example, if there is an accident that involves an employee where they are using their personal vehicle on the job to run an errand or to meet with a customer, the business is at risk for being liable. And technically if the business does not have hired or non owned coverage there is no coverage for this type of incident. So you can see in this scenario that even if you don’t have business vehicles on the policy it is still good coverage to have. And it is relatively inexpensive.
Another example of a risk this covers is if a business borrows or rents a vehicle. In some cases a business may borrow a vehicle from a neighboring business for a delivery of a larger item that they don’t have the capacity for. Here again, if something happens and it is their fault, there will be no coverage unless you have this endorsement on your policy.
Another common instance that businesses often overlook is it covers any rental cars that is rented by the business’s owner, directors, or employees. The rental car agency can provide coverage but it is really expensive and will not have the limits that the hired and non owned coverage will have.
These examples are just a few of the benefits and extensions offered by this endorsement. There are many more in addition to this as well.
If you have any questions about this or any other business insurance inquiry, please email me at firstname.lastname@example.org