Hired and non-owned auto

The two halves

Hired auto covers vehicles the business rents, hires or borrows — the rental car taken for a client visit, the van hired for a delivery.

Non-owned auto covers vehicles the business does not own and does not rent, but which are used on its behalf. In practice that means employees' own cars.

Both are liability covers for the business. Neither insures the vehicle itself, and neither replaces the driver's own policy.

Why the employee's policy is not enough

The employee's personal auto policy is the first line, and it may respond to the accident. But it insures the employee, not the business.

A claim can name the business as well, on the basis that the driving was done for it. The business then needs its own cover, and its general liability policy generally excludes vehicle-related liability.

There is a second problem underneath: a personal auto policy generally excludes business use, so the employee's own cover may not respond fully either. That is a conversation worth having with anyone who drives for you.

What it does not do

It does not cover damage to the employee's car. That is their own policy's job, and this cover does not change it.

It does not cover damage to a rental vehicle either — that is usually handled by the rental company's own arrangement or by physical damage cover added specifically.

It does not turn a personal policy into a commercial one. Where someone is genuinely driving for work regularly, that person's own cover needs to reflect it.

Who needs it

Almost any business where somebody drives for work, which is more businesses than think they do.

• Anyone whose staff visit clients, sites or suppliers in their own cars
• Anyone who makes deliveries, however occasionally
• Anyone who sends an employee on an errand — the bank, the post, supplies
• Anyone who rents vehicles for business travel
• Businesses with no company vehicles at all, which is precisely the group that assumes the question does not apply to them