“We don’t own any vehicles, so we don’t need auto coverage.” We hear it all the time. But your office manager runs to the bank, your sales rep drives to client meetings, and someone rents a car on a business trip. Each of those trips is business use of a vehicle your company doesn’t own, and if something goes wrong, the injured party will come looking for your business, not just the driver.
That’s where hired and non-owned auto insurance (HNOA) comes in, and it’s one of the most overlooked coverages in commercial insurance. Having a policy and being properly covered are two very different things. Here are the five HNOA gaps we see most often.
1. Assuming Your General Liability Policy Covers Driving
The gap: The standard commercial general liability (CGL) form contains what’s known as the “Aircraft, Auto or Watercraft” exclusion. It removes coverage for bodily injury and property damage arising out of the use of an auto owned, operated by, rented, or loaned to any insured. It applies even if the suit claims you negligently hired or supervised the driver.
The claim scenario: Imagine an employee driving her own SUV to drop off paperwork runs a red light and seriously injures another driver. The attorney names the employee and your company because she was on the clock. Your CGL carrier points to the auto exclusion and denies the claim.
The fix: Hired and non-owned auto liability. With no company vehicles, it can often be endorsed onto a Businessowners Policy (BOP) or written standalone. If you own vehicles, it goes on your commercial auto policy (the Business Auto Policy, or BAP) via Symbol 8 (hired autos) and Symbol 9 (non-owned autos), or Symbol 1 (“any auto”).
2. Counting on the Employee’s Personal Auto Policy
The gap: When an employee drives their own car for work, their personal auto policy usually pays first, but personal limits are often far lower than a serious injury claim. Under Utah Code § 31A-22-304, policies issued or renewed on or after January 1, 2025 only have to carry $30,000 per person / $65,000 per accident for bodily injury and $25,000 for property damage. Some personal policies also restrict certain business uses, like paid deliveries.
The claim scenario: Imagine a crew member running to the supply house on an icy January morning on I-15. He rear-ends a car and the other driver needs surgery. His personal policy pays its $30,000 limit. Under the legal doctrine of respondeat superior, the plaintiff goes after the employer for the rest.
The fix: Non-owned auto liability, which sits excess over the employee’s personal policy and protects the business once those limits run out. Also collect proof of insurance from anyone who drives for you.
3. Forgetting That Your Policy Protects the Business, Not the Employee
The gap: Under the standard business auto form, an employee is not an insured when they’re driving a car they or a household member own. Non-owned auto coverage protects the company, but the employee who caused the accident can be left personally exposed for anything above their own personal limits.
The claim scenario: In the same accident, the plaintiff sues both. Your HNOA coverage defends the business, while your employee, who was only running your errand, faces a judgment beyond his personal limits.
The fix: The Employees as Insureds endorsement (ISO form CA 99 33) on a business auto policy. It extends non-owned auto liability to cover employees individually while they use their own vehicles in your business. Your employee’s personal policy stays primary. Availability varies by carrier and by how your auto coverage is written.
4. Rental Cars on Business Trips
The gap: Hired auto liability covers injuries and damage you cause to others while driving a rented car. It does not cover damage to the rental car itself. That takes hired auto physical damage, which is a separate coverage. And if the employee rents in their own name, the standard form may not treat it as your hired auto at all.
The claim scenario: Imagine your project manager flies to Denver, rents an SUV on his own credit card, and slides into a guardrail on a snowy pass. The rental company bills for repairs and lost rental days. You have hired auto liability but no physical damage coverage, and the contract is in his name. Someone is eating that bill.
The fix: Add hired auto physical damage, and ask about the Employee Hired Autos endorsement (ISO form CA 20 54). It treats cars your employees rent in their own names, with your permission and for business, as covered hired autos for both liability and physical damage.
5. Limits That Don’t Match the Risk (and an Umbrella That Doesn’t Follow)
The gap: HNOA is often added at whatever limit was easiest to quote and never revisited. Meanwhile, the commercial umbrella may not list it as underlying insurance.
The claim scenario: Imagine a sales team putting thousands of miles a month on their own cars across the Wasatch Front. One multi-injury accident blows past a basic limit, and the umbrella carrier says the auto exposure wasn’t scheduled underneath it.
The fix: Set your HNOA limit based on how much your team actually drives, then confirm your umbrella schedules it and the underlying limits line up.
Driving deserves this attention. According to the U.S. Bureau of Labor Statistics’ Census of Fatal Occupational Injuries, transportation incidents were the most common type of fatal work injury in 2023, accounting for 36.8% (1,942) of all occupational fatalities. Every business with people on the road shares that exposure, whether or not it owns a single vehicle.
💡 Ask your agent:
- If an employee causes an accident in their own car while running a work errand, which of my policies responds, and in what order?
- Are my employees covered individually (Employees as Insureds), or only my business?
- If someone rents a car in their own name on a business trip, is damage to the rental car covered?
Quick Reference: Hired and Non-Owned Auto Insurance Coverages
| Coverage | What it covers | Why it’s missed |
|---|---|---|
| Non-owned auto liability (Symbol 9) | Your business’s liability when employees drive their own cars for work | Owners assume GL or the employee’s policy handles it |
| Hired auto liability (Symbol 8) | Your liability while driving rented, leased, or borrowed vehicles | “We only rent a car once or twice a year” |
| Hired auto physical damage | Damage to the rented vehicle itself | Assumed to be part of hired auto liability |
| Employees as Insureds (CA 99 33) | The employee’s personal liability while driving their own car for your business | Most people assume the business policy covers the driver |
| Employee Hired Autos (CA 20 54) | Rentals in the employee’s name, for business | Travel booked on personal cards |
| Commercial umbrella | Higher limits above your auto coverage | Auto coverage not scheduled as underlying |
Hired and Non-Owned Auto Insurance FAQ
Does general liability cover employees driving for work?
Usually not. The standard CGL policy excludes bodily injury and property damage arising out of the use of an auto, including autos your business doesn’t own. Hired and non-owned auto liability is built to fill that gap.
Do I need HNOA if my business doesn’t own any vehicles?
If anyone drives for your business, even occasionally (bank runs, client visits, supply pickups, rental cars on business trips), you have an auto exposure. For businesses with no owned vehicles, HNOA can often be added to a Businessowners Policy or written on its own. Availability varies by carrier.
Does HNOA cover damage to the employee’s own car?
Generally, no. Non-owned auto liability protects your business when an employee’s driving injures someone or damages their property. Damage to the employee’s own vehicle normally falls to their personal auto policy. Hired auto physical damage covers vehicles you rent, not cars your employees own.
The Bottom Line
You don’t have to own a fleet to have an auto exposure. If anyone drives on your company’s behalf, your business can be named in the lawsuit. The right hired and non-owned auto insurance and endorsements protect both your business and the people driving for it.
Not sure how yours stacks up? We’ll review your BOP, auto, and umbrella policies and show you where the gaps are. Contact Insure Right Insurance Agency at (801) 407-8360 or [email protected]. Our office is at 831 E 340 S, Suite 200, American Fork, UT 84003. Learn more at insureright.biz.
Contractors with crews driving to job sites may also want to read What Insurance Do Contractors Need?, along with our coverage gap guides for HVAC contractors and plumbing contractors.
This post is intended for general informational purposes and does not constitute legal or insurance advice. Coverage availability and terms vary by carrier and state. Consult with a licensed insurance professional for advice specific to your business.
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