Most General Liability policies have an available endorsement called hired and non-owned auto coverage. By adding this coverage (if applicable) the insured can potentially cover a necessary exposure without having to carry a separate commercial auto policy. Keep in mind that if the business owns vehicles, then a separate commercial auto policy is typically the best option. However, if employees drive their own vehicles in the course of business, or if the named insured occasionally rents or borrows vehicles, this coverage is a necessity for the business.
The hired/ leased portion of the endorsement is designed to protect the business against claims alleged for bodily injury and property damage, with respect to the use of vehicles hired, rented, borrowed, or leased by the insured while in the course of business. However, this coverage typically does not apply when one of your employees or a member of your household hires, leases, rents or borrows a vehicle as an individual. Furthermore, the coverage is designed to protect the business, and not necessarily the individual involved in the claim.
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The non-owned auto liability portion of the endorsement provides the business with liability protection for autos not owned while they are being used in connection with business operations. Examples, would include employees using their personal vehicles which are not owned by the company.
There are two important items to remember about non-owned auto liability coverage. First, the coverage will only cover the named insured, and is not designed to protect the individual using their personal auto on behalf of the named insured. Second, coverage will be excess over any alternate applicable coverages.
The hired and non-owned auto coverage protects against many non-owned auto scenarios aside from the typical example of employees using their personal vehicles in the course of business. Association members, business customers, club members, volunteers, subcontractors, LLC company members, business partners (including family members) are all examples of individuals that could potentially use their own personal autos on behalf of a named insured. Consequently, this endorsement should be considered as a requirement for most commercial businesses and charitable entities.