What is Hired Auto Coverage?

 

Hired auto coverage provides liability protection for vehicles your business leases, hires, rents, or borrows (excluding vehicles rented or borrowed from your employees). It extends the liability coverage from your primary commercial auto policy to these temporary vehicles.

• Extends Liability: It ensures that your business still has liability protection for bodily injury and property damage when using vehicles not permanently owned by your business.

• Covers Temporary Use: This coverage is crucial for situations like renting a van for a one-off delivery, leasing a car for a business trip, or temporarily hiring a vehicle for a project.

Think of it as a bridge; hired auto coverage connects the protection of your commercial auto policy to vehicles you temporarily use for business purposes.

 

Why Is It Important?

 

• Closes Coverage Gaps: Relying solely on the rental company's basic insurance or your personal auto policy might leave significant gaps in coverage, especially if a serious accident occurs. Hired auto coverage ensures your business is protected.

• Protects Business Assets: Without it, your business could be directly liable for damages and legal costs if an employee has an accident in a rented or leased vehicle.

• Common Business Practice: Many businesses frequently rent or lease vehicles, making this a practical and necessary addition for comprehensive protection.

 

Additional Points to Consider:

 

• Check Rental Agreements: While hired auto coverage extends your liability, always review the insurance options offered by rental car companies. Your hired auto policy might make some of those redundant, saving you money.

• Physical Damage: Hired auto coverage typically addresses liability. If you want coverage for physical damage to the rented vehicle itself, you might need "Hired Auto Physical Damage" or "Physical Damage to Non-Owned Autos" coverage, or ensure it's covered by your corporate credit card agreement.

• Named Insured: Ensure your business entity is properly named on the policy to guarantee coverage for all employees operating hired vehicles on behalf of the business.

 

By adding hired auto coverage, you're extending your business's financial protection to all the vehicles you temporarily utilize, ensuring peace of mind on every journey.