Commercial auto insurance provides protection for vehicles owned by a business. If you drive a company vehicle to meet clients or transport equipment, raw materials, or products, you will need commercial auto insurance coverage.
If you use personal or rented vehicles for work, you may need hired non-owned auto insurance. Hired and Non-Owned (HNOA insurance) covers liability expenses for accidents involving vehicles that your business uses for work purposes but doesn’t own. This includes vehicles that your business rents, as well as employees’ personal vehicles that are used for work errands.
For example, if your employee drives his car to drop off a business deposit at the bank and causes an accident, the other driver can sue your business for expenses related to the crash (e.g., medical treatment and vehicle repair damages). HNOA insurance can cover these costs.
If you use your personal vehicle for work, your personal auto insurance policy may not cover you. These policies generally exclude business driving from their coverage, so you would be personally responsible for expenses if you get into an accident while delivering or hauling goods. Check to see what your coverage entails because every personal policy is different.
Any Auto coverage: Liability coverage for any vehicle (anything owned by an Insured, hired, or not owned). Typically includes any vehicles that are added during a policy term even if it is forgotten to be reported to the insurance carrier.
Owned Auto coverage: Coverage for any vehicle the Insured acquires or owns (typically if they are titled to the business). Liability coverage extends to trailers/semitrailers that the Insured does not own, only while attached to a “power unit” that the Insured does own. No coverage for hired/borrowed or non-owned autos.
Scheduled Auto coverage: Coverage is only afforded to the vehicles that are specifically listed on the Insured’s schedule (which is included in the actual Auto policy itself). No coverage for vehicles outside of the schedule.
Hired Auto coverage: Coverage for automobiles that are hired, rented, leased, or borrowed, but not from any of the business’ employees, partners, limited liability members, or the members of their households. This coverage only applies to these types of vehicles to the business, not outside of the business.
Non-Owned Auto coverage: Coverage for automobiles used in connection with the business, that is not owned, leased, hired, rented, or borrowed by the named insured. Typically automobiles are owned by employees and used for business.
Example: Vendor sends their employee to run an errand for the business (post office, Home Depot, etc) while driving their own car and the employee causes an accident, the vendor business could very well be named a negligent party to a lawsuit.