What is it?
Non-owned auto insurance coverage helps pay for bodily injury and property damage caused by a vehicle that you do not own while operating it as part of your business. This coverage is available to purchase as an endorsement to your business’ commercial auto policy, or to your commercial general liability policy.
This insurance term ‘non-owned auto’ generally refers to:
- Employees who use their personal vehicles for work, including infrequent use such as running an errand, or more regularly such as doing deliveries,
- Rented or leased vehicles that your business requires, and
- Contractors or volunteers who drive vehicles in relation to your operations which are not owned by your business.
Why is this coverage important?
If you have employees who use their personal vehicles for work, you rent or lease vehicles for your business, you hire contract drivers, or have volunteers who drive their vehicles in relation to your operations, your business could be held liable if an accident happens. Without this coverage, you could end up paying for legal costs and damages that could run in the thousands.
How does non-owned auto coverage work?
For example, your employee went to pick up a poster that will be used for an event at your office. On the way back to the office, the employee was in a car accident that caused injuries to the other party and was found liable. The injured party sued for damages.
In this scenario, the employee’s personal auto insurance policy would respond first to the liability claim. If the damages go beyond their policy coverage amount, the business’ non-owned auto coverage would cover the remaining amount.
Similarly, if a contractor hired by your company drives their own car to do an installation for you, or a volunteer drives their own car to do a delivery, and cause an accident for which they were liable, their own auto insurance policy would respond first to a liability claim. Again, if the damages go beyond their policy coverage amount, the business’ non-owned auto coverage would cover the remaining amount.
Learn more about commercial general liability insurance and commercial auto insurance to protect your business.
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The content on this page is for information only. The insurance products described are subject to terms, conditions, limitations and exclusions that are outlined in the policy wording. Please refer to the policy wording for complete details.