Commercial Auto Vs. Hired And Non-Owned Auto Insurance

A man drives his own vehicle to make business deliveries.
| 12.27.21
Susan G.

Being prepared for the unexpected is one of the costs of doing business. No matter how detailed your plans may be, there’s always the possibility of something going wrong. For example, you take a risk every time you or one of your employees gets behind the wheel for work. Whether you’re delivering pizzas, bringing tools to a job site, or making a house call for a customer, you’re introducing an element of uncertainty.

Although most of the time these trips go smoothly, an accident on the road involving your business vehicles could cost you a lot. This is why it’s crucial that your company carry insurance for all cars, trucks, or vans you use to get the job done.

However, it isn’t as simple as just deciding to get coverage and signing the paperwork. For instance, you need to be aware of the difference between commercial auto vs. Hired and Non-Owned Auto Insurance (HNOA). Read on to learn what makes these types of policies different and why you should have one, the other, or both.

The Differences Between Commercial Auto vs. HNOA Insurance

The main distinction between these two types of protection is in the ownership of the vehicles they cover. Commercial auto insurance covers any vehicles that your organization owns, such as company cars, service trucks, delivery vans, and more. These policies typically provide protection in the event of an accident involving any of your business vehicles. It can pay for liability if there is damage to another vehicle; medical expenses for any related injuries; and physical damage to your vehicle. It also protects you in the event an uninsured driver causes an accident that involves your property.

However, not every business owns its own fleet. Many businesses rely on the use of employee-owned cars or trucks or rented vans. In some cases, these vehicles are used alongside company-owned vehicles. This is where HNOA insurance becomes necessary. These policies provide coverage for any vehicles that are used for business purposes but are not owned by the enterprise itself. The most common reason to have HNOA insurance is when an employee uses his or her personal car to run an errand, such as running to the bank or delivering food for a customer. These policies can be purchased on their own or added as a rider to a general liability policy.

It is important to note, however, that HNOA insurance only provides protection for incidents that are work-related. If an employee goes out on his or her lunch break and is involved in a collision, for example, this is not covered. You also need to know that physical damages to the non-owned vehicle are not included in coverage—these policies are strictly for liability expenses.

There’s no way to avoid risk entirely, which is why you need to be prepared for every possible situation. If you think your commercial auto insurance policy protects you in every scenario, you should take a closer look and make sure you have everything you need. Knowing about HNOA insurance and what it can do for you is a good start.

About the Author

B2Z Insurance is a small business insurance company that provides coverage for on-the-go business owners: simple explanations, easy application, digital quotes, and mobile claims. A product that is easy-to-use and helps you assess the unique coverage needs of your business with confidence—freeing you up to grow your business.