What is hired and non-owned auto insurance?

Hired and non-owned auto insurance (HNOA) is a type of liability insurance that protects your business when employees or owners use vehicles your company doesn’t own for work purposes. It’s not about insuring the car itself—it’s about protecting your business if someone gets hurt or property is damaged and you’re named in a lawsuit.

There are two key vehicle categories here: 

  • Hired autos are vehicles your business rents, leases, or borrows. For example, a delivery van rented for a few days. 
  • Non-owned autos are personal vehicles—usually your employees’—used for work errands, deliveries, client visits and so on.

And yes, even a quick Starbucks run can count as business use. If your employee is driving on company time and company business, it’s your company’s risk. 

Why HNOA insurance coverage is so important to small businesses 

The truth is that many small businesses need HNOA and don’t even realize it. If anyone on your team ever uses a personal or rented vehicle for business purposes, this insurance becomes essential. We’re talking about everything from catering businesses and landscaping crews to consultants and law firms.

Here’s why it matters: Personal auto insurance policies often exclude business use. That means if an employee gets into an accident while running a work errand in their car, their personal policy may not pay out—or it may hit its coverage limits fast. Once that happens, guess who’s next in line? You.

Without HNOA, your business could be sued and face a massive financial burden for something as routine as a trip to the post office.

What type of businesses need hired and non-owned auto insurance coverage?

In addition to catering and landscaping companies, any number of other businesses that rent or lease vehicles could benefit from this coverage, according to small-business insurance brokers Insureon, including:

  • Building design firms
  • Construction companies
  • Food and beverage services
  • Installation professionals
  • Real estate firms

What HNOA covers—and what it doesn’t

HNOA covers liability for bodily injury and property damage caused by a hired or non-owned vehicle used for business purposes. It can also cover legal defense costs and any settlements or judgments if your business is sued.

But here’s what it won’t cover: damage to the vehicle itself (you’ll need separate coverage for that), injuries to your employee (that’s workers’ comp territory) or any intentional wrongdoing. It also doesn’t apply to company-owned vehicles—those fall under your commercial auto policy.

How much does HNOA insurance cost?

Insureon, the small-business insurance broker, doesn’t have an exact price for HNOA insurance but says small businesses can use commercial auto insurance rates, which it says averages about $147 a month, to get an idea of what they’ll pay. Insureon based its number on the median price its customers paid for commercial auto from leading insurers.

But prices vary depending on, among other factors, your business, its location, your claims history, the type of vehicle you’re looking to insure and the insurance company you use. 

Some of the companies that sell HNOA insurance include:

  • Allstate
  • biBerk
  • Nationwide
  • Next
  • Progressive
  • Travelers
  • USAA

Hired vs. non-owned: What’s the difference?

The terms hired and non-owned are easy to confuse, but here’s the breakdown:

A hired vehicle is one you’ve rented or borrowed—maybe for a client meeting, a delivery run or an out-of-town job. 

A non-owned vehicle is typically an employee’s personal car used for business purposes. If your sales rep drives their car to meet a client, that’s non-owned. If you rent a U-Haul for a weekend event, that’s hired.

How HNOA works in the real world

So, how does HNOA coverage work in practical terms?

Imagine you run a bakery. Your assistant manager uses her car to deliver a custom cake to a local wedding venue. On the way, she accidentally runs a stop sign and causes a serious accident. The injured party sues—not her, but the business. Her personal insurance only covers $50,000, but the lawsuit is for $200,000.

Without HNOA, your bakery is exposed to the remaining $150,000 and the legal costs. With HNOA, you’re protected.

HNOA vs. commercial auto: Do you need both?

If your business owns vehicles, you likely already have commercial auto insurance, which covers damage and liability for those company-owned cars or trucks. But commercial auto doesn’t extend to employee-owned vehicles or rentals.

That’s why many businesses carry both. Commercial auto covers what your business owns. HNOA covers everything else you use—but don’t own.

Adding HNOA to your coverage

You can often add HNOA to your existing general liability or commercial auto policy as an endorsement. It’s typically affordable—especially compared to the risks it helps manage. For example, Next Insurance offers HNOA as a commercial insurance upgrade for about $7 a month.

Check with your broker or insurer to find out if you can add HNOA to an existing policy. Make sure you ask about coverage limits and any exclusions that could come back to bite you.

What counts as a hired or non-owned vehicle?

Hired vehicles include any cars, trucks or vans your company rents, leases or borrows—even if it’s just for a few hours. That can include a car rented for a business trip or a borrowed truck for a charity delivery.

Non-owned vehicles are those owned by employees or even volunteers—but used in the service of your business. If it’s not registered to your company, but someone’s using it for work? That’s non-owned.

How much HNOA insurance coverage should you carry?

Coverage limits vary by industry and risk, but a good rule of thumb is at least $1 million per occurrence and $2 million aggregate. Higher limits may be necessary for businesses operating in urban areas or dealing with high-value goods or services. Also, keep in mind that some larger clients may require you to carry HNOA at specific limits to work with them.

Final thoughts

Hired and non-owned auto insurance is one of those coverages that flies under the radar—until you need it. And by the time you do, it’s too late. It’s inexpensive, easy to add, and, in many cases, absolutely essential. If your business relies on wheels it doesn’t own, you can’t afford not to have it.

Need help sorting through your options or figuring out if your current policy includes HNOA? Talk to your insurance broker—or better yet, make it a habit to ask every year during renewal season. Your future self will thank you.

Gaudio is a founding member of Miller and Gaudio, P.C. and a Certified Civil Trial Attorney recognized by the New Jersey Supreme Court. With a focus on medical malpractice, sexual harassment, product liability and complex litigation, he has secured significant results through strategic discovery and expert advocacy in both state and federal courts.