Non-Owned and Hired Auto Liability Insurance
Non-Owned and Hired Auto Liability Insurance. Many business insurance policies often include a non-owned and hired auto liability insurance. It may be part of your general liability coverage or maybe included as part of your commercial auto insurance. But not many people fully understand what this insurance is, or even why they need one in the first place.
Carrying adequate non-owned and hired auto liability insurance to protect your business is smart and also a must if you want to make sure that you don't get put in a position where you have to pay money out of pocket to cover expenses associated with a loss.
Non-owned and hired auto liability insurance covers bodily injury and property damage caused by a vehicles you hire like rental cars, or caused by non-owned vehicles like an employee's car.
What Is Hired and Non-Owned Automobile Liability Coverage?
Although many insurance companies and agents refer to non-owned and hired auto liability insurance as a single term, in reality, there are two types of covers involved; liability resulting from the use of hired autos, and liability resulting from the use of non-owned autos being use for the benefit of your business. Even though they are usually included together, it’s importance to understand the distinction between the two and what each of them covers.
Hired Auto in this context is used to describe vehicles that are hired, rented or borrowed by the business. For instance, if you rent a vehicle to use on a business trip, that is hired auto. If you occasional rent a truck to move merchandise or materials, that is also hired auto.
Non-Owned Auto on the other hand, is not hired, rented or borrowed by the business, but it’s being used to benefit the business. For instance, if your employee uses their personal vehicle to make sales calls or run errands, you are exposed to non-owned auto liability.
What Does Non-Owned And Hired Auto Cover?
Whether you realize it or not, your business occasionally gets exposed to one or both the hired and non-owned auto liability. Rental and errand situations always pop up. Here are some few questions you should ask yourself when trying to determine whether or not you require this important coverage:
- Do your employees use their own vehicles to go to the bank or post office on behave of the company?
- Have you ever sent employees to pick office supplies or drop off mail using their personal vehicles?
- Does your field team or sales force use their personal vehicles for business?
- Do you occasionally sent your employees to pick up visitors from the airport using their personal vehicles?
- Do you hire trucks to move materials or supplies?
- Do you or your employees occasionally hire vehicles when going for a business trip?
If you or your employees have an accident under any of the above circumstances, your business may be held accountable and sued for damages. General business auto policies only cover employees while using company owned vehicles to carry out business operations. The best solution is to add a hired and non-owned automobile liability coverage to your general auto insurance policy or opt for a commercial auto insurance that has this option included in it.
The coverage will kick in during an accident where your company is found liable. Typically, your employee’s personal auto insurance cover will provide primary insurance if the employee is using their personal vehicles to conduct company business. However, chances are the damages will exceed the employee’s policy limit and would then be passed on to your company. If you don’t have hired and non-owned auto liability policy in place, your business will be vulnerable to potentially costly exposure.
Hired and non-owned auto liability coverage covers property damage and bodily injury caused by a vehicle you hire (including borrowed and rented) or non-owned auto (vehicles owned by others including partners and employees). As earlier mentioned this coverage can be purchased as a standalone or added to your existing business automobile policy or general business liability policy. Hired auto coverage augments or replaces the liability coverage offered by the auto rental agencies.
Does It Cover Legal Defense costs?
A great feature of this coverage is that if your company is sued, even the claim is frivolous and has no grounds - or you are not legally responsible; this policy still has you covered. Hired and non-owned auto liability coverage will typically pay for any cost incurred by the insurance company including attorney's fees, police reports and witness fees. Additionally, it will cover court costs and any other costs related to the legal suit.
Non-Owned And Hired Auto Liability Cost
Hired and non-owned auto liability coverage protects your business against serious damages and losses, and the best of all, it’s extremely affordable. If you have an existing business or commercial auto insurance policy you can simply add this on. If your business or commercial auto insurance doesn't have hired and non-owned auto liability coverage, you can buy this as a stand alone policy.
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Get useful tips and information about how much commercial insurance costs, small business risks and exposures, how insurance regulations effect your businesses' and detailed descriptions of coverages and exclusions and more. Most small businesses need to buy the following four types of insurance at a minimum to cover their operations from every day risks:
Property Insurance: This policy covers a business if the property used in the business is damaged or stolen as the result of common perils like fire or theft. Commercial property insurance covers the buildings, structures and also business personal property - which includes furniture, inventory, raw materials, machinery, computers and other items.
Liability Insurance: Any company can be sued. Slip-and fall lawsuits are very common and be costly. Customers can claim you injured them or damaged their property - and lawsuits are very expensive. Commercial liability insurance pays damages and can include attorney's fees and other legal expenses. It also ca pay for the medical bills of injured third parties
Commercial Auto Insurance: For vehicles owned by the business. Commercial auto insurance pays bodily injury or property damage costs for which the business is found liable - up the the policy limits for liability and property damage.
Workers Compensation Insurance: In almost every state employers must provide workers comp when there are W2 employees. Workers compensation pays for the medical care of employees and can replace a portion of lost wages - regardless of who was at fault for the injuries.