Coverage types
Not every California business owns a fleet of work vehicles. Plenty of contractors, consultants, and service companies depend on employees using personal cars or rented vehicles for business tasks. When an accident happens in one of those situations, the business can still be held liable — and a standard Commercial Auto policy may not respond. That is where hired and non-owned auto coverage comes in.
Hired auto coverage applies when a business rents or leases a vehicle for business use. If an employee rents a truck to deliver equipment or picks up a rental car for a business trip and causes an accident, hired auto coverage can help pay for liability claims the business becomes responsible for. It supplements the rental company's basic coverage, which may carry low limits or exclude certain business activities.
For California businesses that occasionally rent vehicles for large jobs, trade shows, or seasonal deliveries, hired auto coverage can be an affordable way to close a significant gap.
Non-owned auto coverage applies when an employee uses their personal vehicle for business purposes. If a California office manager drives to the bank for a company deposit, or a technician drives between job sites in their own car, non-owned auto coverage can protect the business if the employee causes an accident.
Importantly, non-owned auto coverage protects the business, not the employee. The employee's personal auto insurance is still the primary coverage for their own vehicle. Non-owned coverage steps in when the business is named in a lawsuit resulting from the employee's driving.
A California catering company sends employees to deliver food using their personal cars. A contractor rents a box truck for a large job. A real estate agent drives clients to property showings in a personal vehicle. Each of these situations creates business liability that a standard Commercial Auto policy — which covers owned vehicles — may not address.
Without hired and non-owned auto coverage, the business could face a lawsuit with no insurance response. The cost of defense alone, before any settlement, can be significant.
Hired and non-owned auto coverage is typically added as an endorsement to a Commercial Auto policy or a General Liability policy. If your California business does not own any vehicles, it can sometimes be added to a Business Owner's Policy. Talk with your agent about how employees use vehicles, whether you rent vehicles for work, and what your client contracts require.
To add hired and non-owned auto coverage or review your business vehicle protection, visit the California Commercial Auto insurance page. Also explore General Liability and Workers' Comp for complete coverage. Call 916 234 5514 — open 7 days a week, 8am to 8pm.