Hired and Non-Owned Automobile Insurance

When purchasing automobile insurance for your business, you must first decide which vehicles you want to cover for liability. There are generally three options: automobiles owned by the business; all automobiles owned, hired, or leased; or all automobiles, including those that are not owned, hired, or leased.

Hired auto liability coverage will pay for damages to a third party, on behalf of your company, if you cause an accident or an injury to someone while you are driving a rented car or “non-owned” vehicle for business. For example, if you rent a car to visit a client, and cause an accident on the way there, the person you hit will look to your company to pay the damages. Without this coverage, your company may have no insurance coverage for a rented car.

The same scenario applies if you have an employee run an errand, or visits a client in his or her own car. When the employee causes the accident, the injured party is going to look to your company to pay for damages since the employee was using the car on company time. This can also apply if you casually ask a friend to pick up office supplies for you the next time they go to the office supply store and an accident occurs!