You ask an employee to pick up office supplies, make a bank deposit, or grab lunch for a staff meeting. They take their own car, just like they have done before.
On the way, they cause an accident.
Their vehicle belongs to them—but because they were running an errand for your business, your company could also face a claim.
That is why hired and non-owned auto liability coverage deserves attention, even if your business does not own a single vehicle.
My recommendation is simple: If you have even one employee who might drive on a business errand, review this coverage with your agent. It should be part of your business insurance conversation before someone picks up the keys.
What Is Hired and Non-Owned Auto Insurance?
Hired and non-owned auto insurance, often shortened to HNOA, helps protect your business against certain auto liability claims involving vehicles your company does not own.
There are two parts:
Hired auto liability generally addresses vehicles your business rents, hires, leases, or borrows for business use, subject to the policy’s definitions.
Non-owned auto liability generally addresses vehicles your business does not own, such as an employee’s personal car used for company errands or client visits.
Both focus on your business’s liability for covered injuries or property damage to others. They are not automatically coverage for damage to the vehicle being driven.
Why Even One Employee Can Create an Exposure
You do not need a delivery fleet or a traveling sales team to have an auto liability exposure.
Think about how often someone at your business might say:
- “Can you run to the bank?”
- “Please pick up those parts.”
- “We need more supplies before the next appointment.”
- “Can you drop these documents off with the client?”
- “Please pick up lunch for the training meeting.”
Each request can put an employee on the road for your business.
If that employee causes an accident while performing the errand, the injured party may pursue both the driver and your company. Whether your business is legally responsible depends on the circumstances, but defending the claim can itself be expensive.
An occasional errand still creates an exposure. Travelers specifically notes that employees can expose a business to auto liability whether they drive frequently or infrequently.
For that reason, I believe hired and non-owned auto coverage should be a standard consideration for businesses with employees. The number of employees matters less than whether anyone drives on your behalf.
Examples of When This Coverage Could Matter
The following examples are hypothetical and illustrate situations to discuss with your insurance agent.
An Office Employee Makes a Bank Deposit
Your administrative assistant uses their own car to deposit checks for the company. While turning into the bank, they cause a collision that injures another driver.
Because the trip was for company business, your business could be named in the claim. Non-owned auto liability may help protect the company, subject to the policy.
A Contractor Sends Someone for Parts
An employee drives their personal pickup to a supply house to get a replacement part needed at a job site. On the way back, they rear-end another vehicle.
Even though your business does not own the pickup, the employee was completing a work assignment. This is an exposure worth discussing before the next supply run.
A Salesperson Visits a Customer
Your sales representative uses their own vehicle to meet a prospective client. They cause an accident while driving between appointments.
Non-owned auto coverage can be relevant to businesses whose employees regularly use personal vehicles for sales calls, inspections, or customer visits.
Your Business Rents a Vehicle for a Conference
You rent a car for a business trip. While driving from the airport to the conference, you cause an accident.
Hired auto liability may help address your company’s covered liability. Damage to the rental car itself requires a separate coverage review.
Your Team Rents a Van for an Event
Your company rents a van to transport displays and supplies to a trade show. An employee driving the van strikes another vehicle.
This creates a hired auto exposure. Before renting, confirm that your policy covers the vehicle type, intended use, and rental arrangement.
“Doesn’t the Employee’s Personal Auto Insurance Cover It?”
It may provide coverage, but that does not eliminate the need to protect your business.
An employee’s personal auto policy may respond first to a covered accident. However, its limits may be insufficient, and coverage for business use depends on the policy and the activity involved. Non-owned auto liability commonly provides protection for the business above other applicable insurance. The exact order of coverage depends on the policies and circumstances.
Two questions need separate answers:
Does the employee have appropriate insurance for the driving they perform?
Does your business have liability protection if it is also brought into the claim?
Do not assume that a personal insurance card answers both questions. HNOA also should not be treated as a replacement for employees maintaining appropriate personal auto coverage.
What Hired and Non-Owned Auto Liability Does Not Automatically Cover
Understanding the limitations is just as important as understanding the protection.
Damage to the Employee’s Car
Non-owned auto liability generally does not pay to repair the employee’s vehicle. Their collision coverage, if applicable, is a separate matter.
Damage to a Rental Vehicle
Hired auto liability is different from hired auto physical damage coverage.
Before renting, ask about protection for the rental vehicle itself, including applicable deductibles and potential rental company charges.
The Employee’s Own Injuries
HNOA liability is not a substitute for workers’ compensation or other applicable injury coverage.
Every Employee’s Personal Liability
Coverage protecting your business does not necessarily make an employee an insured while driving their own car. Ask your agent whether additional employee protection is available or appropriate.
Ordinary Personal Driving
A personal shopping trip or ordinary commute generally differs from an employer-directed errand. Mixed-purpose trips and business stops during a commute deserve a closer review.
Vehicles Your Business Owns
HNOA does not replace appropriate commercial auto coverage for company-owned vehicles.
Is HNOA Automatically Included in a Business Policy?
Do not assume it is.
Depending on the insurer and your operations, hired and non-owned auto coverage may be available through a business owners policy, a general liability endorsement, or a commercial auto policy.
Having general liability—or even having a policy on a company vehicle—does not by itself confirm that hired and non-owned exposures are covered. Ask your agent to identify the actual coverage on your policy.
The goal is to have the protection arranged correctly within your insurance program, rather than adding duplicate coverage to every policy.
Deliveries and Regular Driving Need Extra Attention
An occasional bank deposit and a business making deliveries all day present different risks.
Tell your agent if employees:
- Deliver food, products, or equipment.
- Transport customers or other passengers.
- Regularly travel between job sites.
- Use their own vehicles for service appointments.
- Rent vehicles frequently.
- Rent vehicles in their own names for company business.
These details can affect eligibility, pricing, and the endorsements needed. A policy intended for incidental errands may not fit a delivery operation.
Practical Steps to Reduce Your Risk
Insurance is one part of managing business driving. Employers should also establish clear expectations.
Verify that authorized drivers have valid licenses and appropriate insurance. Confirm that employees have discussed their work-related driving with their personal auto insurer.
Set rules against distracted driving, maintain an accident reporting procedure, and review driving responsibilities as your business changes.
Before a rental, confirm whose name should appear on the agreement and what liability and physical damage protection applies.
Questions to Ask Your Insurance Agent
At your next review, ask:
- Do we currently have both hired and non-owned auto liability coverage?
- Does it cover the errands and other driving our employees actually perform?
- What limits apply, and how does the coverage interact with other insurance?
- Are employees themselves insured while driving personal vehicles?
- Do we need hired auto physical damage coverage?
- Does our commercial umbrella extend over these exposures?
- What changes should we report as our driving activity grows?
Protect Your Business Before the Next Errand
“We don’t own any company vehicles” does not mean “we don’t have an auto exposure.”
If an employee might drive their own car to pick up supplies, visit a customer, or complete another business task, your company should review non-owned auto liability. If you rent vehicles for work, review hired auto protection as well.
At MBG Insurance, we help business owners in Missouri, Arkansas, and Kansas review coverage for their operations. With offices in Springfield, Oak Grove, and Bentonville, our team can help you determine where hired and non-owned auto coverage belongs in your insurance program.
Learn more about commercial auto insurance from MBG Insurance, including coverage options for company vehicles and hired and non-owned auto exposures.
Before you send an employee on the next errand, make sure you know how your business is protected.
About the Author
Brandon Thompson is CEO and co-founder of MBG Insurance and a Certified Work Comp Advisor (CWCA). He helps business owners understand their commercial insurance options through MBG’s offices in Springfield and Oak Grove, Missouri, and Bentonville, Arkansas.
November 2, 2026
Coverage is subject to the terms, conditions, exclusions, and limits of the policy issued. Examples are hypothetical and do not guarantee coverage.