Non-Owned Car Liability Insurance

Why do I need non-owned auto liability insurance?

Non-Owned Auto Liability Insurance, or hired non-own auto coverage, protects you if you have employees who sometimes drive their own car, or even one they have rented, for business.  

Here’s an example. A realtor asks their administrative assistant to put up advertising signs for an open house. While doing so, the assistant gets in an accident in which the other driver is injured. The realtor’s non-owned car insurance policy would cover the damage to the other driver’s vehicle as well as costs related to their injuries.  

When an employee is operating his or her own vehicle, or one you have rented for business purposes, and gets in an accident, your business could be liable. A non-owned auto liability insurance policy will provide coverage for third-party property damage and bodily injury as a result of an accident. If a lawsuit is filed as a result of an accident, your policy will cover defense costs without reducing your limits of liability, even if the suit is found to be without merit.  

Non-owned vehicle liability insurance details

Non-Owned Auto Liability Insurance covers your liability when the personal vehicle of an employee or temporary staff, whether owned or rented by them, is driven for business. The vehicle must be in-use for business purposes at the time of the accident.

It covers damage to another vehicle or property and medical costs associated with injury to a third party from an accident. It also covers defense costs if you or your employee are sued as a result of a covered accident. Defense costs will be covered even if the suit is found to be groundless.  

Who is covered by non-owned auto liability

Non-owned Auto Liability Insurance covers permanent and temporary employees of your company, whether they work part-time or full-time. It covers your business to the extent that you are liable for the actions of these employees.  

Non-owned Auto Liability Insurance is an upgrade to a Business Owner’s Policy, and coverage is part of the occurrence limit associated with that policy. 

What the policy doesn’t cover 

• Your vehicle or one owned by your business. Vehicles that are owned or regularly operated by your business should be covered by a commercial auto policy. 

• Physical damage to the vehicle being operated by the employee. This should be covered by the employee’s personal auto insurance policy or rental agreement. 

• Damage to property being transported or property within your care.