What is hired and non-owned auto coverage?
It is liability coverage for bodily injury and property damage caused by a vehicle you hire (rental vehicles and borrowed vehicles) or caused by non-owned (vehicles not owned by the business, like employee's) vehicles while in use in the course of your business. Typically, it does not cover physical damage (comprehensive and collision) unless additional coverage is purchased specifically for these perils.
Who needs coverage?
All business owners have potential exposure and should consider purchasing hired and non-owned auto coverage. If you have employees and they perform ANY of the following tasks, you need this coverage:
1. Drop off or pick up deposits at the bank
2. Purchase office supplies at a store
3. Pick up or drop off mail for the business
As an owner, you can still have an exposure. For example, if you are renting a car to use on a business trip, there is the potential for an accident where the coverage would apply.
When does coverage apply?
When a non-owned or hired vehicle, used in the course of your business, is involved in an accident, this coverage responds. The most common example is an employee using their personal vehicle to run an errand for the business, such as dropping of the bank deposit or mail. There are state specific laws regarding accidents and insurance coverage, so be sure to check your specific state. Generally speaking, in Illinois, if the vehicle is being used for business purposes and is involved in an accident the business could be assigned a portion of the liability for the accident. The personal automobile insurance company could decline coverage or the business could be involved in a lawsuit. If hired and non-owned coverage has been purchased the policy would pay to defend against the lawsuit and any liability damages to injured parties if the client was determined "at fault".
How do you get coverage and what is the cost?
Hired and non-owned auto coverage can often times be added to your Business Owners Policy for a minimal premium per year. You can also purchase a monoline (stand alone) policy for just this coverage. Premiums are based on the type of business, number of employees, and your dollar exposure per year of renting vehicles, so premiums do vary. In Illinois and Missouri, many policies are available starting at $250 per year.
M & M Insurance Agency, Inc., your trusted local independent insurance agent, is here to guide you through the coverage options and help you pick the right insurance plan for you! Please contact us with any questions and one of our trained professionals would love to talk to you about your coverage options. Call us today for a quote!