Have you ever forgotten something at the office and sent an employee back in their auto to grab it? Or ran out of change prior to the auction and sent someone in their personal auto to the store or bank to get more? What about someone who is working on your behalf and they drive their own vehicle to the consignor’s home from your office?
All of these scenarios have one thing in common – a vehicle is being used for your business operations that does not belong to the business. If the driver of the vehicle is involved in an accident, your business is open to a liability claim because the driver was using their personal vehicle while “in the course and scope of your employment”. Even if they are independent contractors, they are still conducting YOUR business and therefore, there is the opportunity for the liability to be passed on to you or your business.
This is where Hired & Non-Owned Auto coverage comes in to play.
Hired & Non-Owned Auto coverage (H&NOA) provides coverage for bodily injury or property damages to other people arising out of the maintenance or use of a non-owned auto in the course of your business. This includes autos owned by your employees while being used in the course and scope of your business. This coverage can be added to your policy for both liability and / or property damage.
In the three scenarios above, even though the driver was using their own personal vehicle, it was while they were performing services for your business. Because of this, your business has a liability exposure for the resulting injuries and damages. Without H & NOA coverage , your business may be self-insured, having to pay these liabilities out of your cash flow.*
*Each claim is evaluated on its own merit at the time of the claim. The above scenarios are broad examples to help with understanding the relationship between the business and the IC. Please read your policy for full coverage details.