Commercial Auto
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COMMERCIAL AUTO / HIRED AND NON-OWNED AUTO INSURANCE

Introduction: Commercial Auto

Introduction: Commercial Auto

Sometimes called Business Auto Insurance, Commercial Auto / Hired and Non-Owned Auto Insurance policies cover the cars, trucks, vans, and other vehicles your client uses in the course of business. Commercial Auto Insurance protects your client against loss or damage to vehicles they own, plus the loss or damage their business vehicles may cause to others. Hired and Non-Owned Auto Insurance covers liability for bodily injuries and property damage caused by a vehicle your client rents, leases, hires, or borrows, up to the policy's stated limits.

Typically, Hired and Non-Owned Auto Insurance is added as an endorsement to your client's Commercial Auto policy. These can also be added to your client's General Liability policy if they don't have Commercial Auto.

What Is Commercial Auto Insurance?

What Is Commercial Auto Insurance?

Commercial Auto Insurance covers the vehicles owned and used by your client's business. Most Commercial Auto policies have three basic components:

  • Physical damage. This includes collision and comprehensive coverage. Collision coverage pays for damages to your client's business vehicle when it hits or is hit by another vehicle. Comprehensive coverage pays to repair your client's business vehicle when it is damaged in an event other than an accident. For example, comprehensive coverage would kick in if the vehicle is damaged by thief breaking its windows.
  • Liability. This covers bodily injuries and property damage to a third party when your client is at fault. It may pay a third party's medical costs, lost wages, and your client's legal defense fees up to the policy limit. It can also include uninsured and underinsured motorist coverage, which picks up the slack when a driver doesn't have insurance or carries only the minimum coverage.
  • Other coverages. Some Commercial Auto policies include coverage for medical payments, towing and labor, auto loan and lease gap coverage, and rental reimbursement.

Your client can also customize their policy to fit their business needs. For example, they may want to add endorsements for roadside assistance, personal injury protection, or new vehicle replacement cost coverage.

What Is Hired and Non-Owned Auto Insurance?

What Is Hired and Non-Owned Auto Insurance?

Not all small businesses own vehicles, but most small businesses need to use them. For example, your client might rent a car for a business trip or subcontract delivery vans. This exposure makes Hired Auto Insurance an important protection for your clients. It protects them when they are held liable for an accident while using this vehicle for business purposes.

Non-Owned Auto Insurance covers your client when their employee drives a personal vehicle to run business errands - a fairly common situation for small-business owners. Your client might send an employee to the post office or require their sales team to drive their own cars to appointments. A Non-Owned Auto policy steps in when an employee has an accident in their personal vehicle while performing business tasks. It covers your client's legal expenses if a third-party sues over the wreck.

Who Needs Commercial Auto / Hired and Non-Owned Auto Insurance?

What Is Hired and Non-Owned Auto Insurance?

Auto liability claims are very expensive, so if your client's business owns any vehicles, they need Commercial Auto Insurance. But your client also needs coverage if they..

  • Use their personal vehicle as their company vehicle.
  • Require employees to drive their personal vehicles for business errands.
  • Rent cars for business trips.
  • Subcontract delivery drivers.
  • Employ workers who are taxied to a worksite.