It happens a hundred times a week across Colorado. An employee runs to the bank, picks up supplies, or drives to a client site in their own car. A team member rents a vehicle for a job up in the mountains. A delivery gets dropped off on the way home. Most business owners assume that if someone is driving for work, the business is covered. Often it is not. The coverage that fills this gap is called hired and non-owned auto, and a lot of Colorado businesses do not carry it because they assume their commercial policy already handles it.
What hired and non-owned auto actually covers
Hired and non-owned auto, sometimes shortened to HNOA, is liability coverage for two situations your business creates but does not own the vehicles for. “Non-owned” means a vehicle your business does not own, such as an employee’s personal car used for a work errand. “Hired” means a vehicle your business rents, leases, or borrows for short-term use. It responds to the liability side, meaning the bodily injury and property damage the driver causes to others while on business use. It is usually added to a commercial auto policy or a business owners policy, and it is often one of the smaller line items on the account relative to the exposure it addresses.
Where the gap shows up
The gap is easy to miss because the driving looks routine. An office manager drives to the post office and rear-ends someone at a light. A field technician uses a personal truck to reach a job and is at fault in a crash. A manager rents a car for a trade show and backs into another vehicle. An employee makes a quick delivery on the way home. In each case the business can be pulled into the claim because the driving was for the business, even though the business never owned the vehicle.
Why your commercial auto or business policy may not respond
A commercial auto policy is usually written around scheduled, owned vehicles. If the only cars listed are the ones the business owns, the policy may not extend to a personal car or a rental used for work. A business owners policy typically covers the building, contents, and general liability, but general liability carries an auto exclusion, so it is not designed to pick up a vehicle claim. That leaves the employee’s personal auto policy as the first line, and personal policies can limit or exclude business use. When the personal limits run out or the claim is denied for business use, the business is the next target.
Who needs it in Colorado
If anyone connected to your business ever drives for work in a vehicle the business does not own, you have this exposure. That covers a wide range of Colorado operations: contractors and trades whose crews use personal trucks, small offices that send staff on errands, nonprofits with volunteer drivers, home-based businesses, and companies that rent vehicles for travel across the state. Colorado adds two wrinkles worth naming. Hail and winter road conditions can turn a minor incident into a costly one, and the state has a high share of uninsured and underinsured drivers, so a crash involving your employee can get expensive fast. Pairing this coverage with an umbrella policy can extend the liability protection even further.
How to close the gap
Closing this gap is usually simple. Hired and non-owned auto can be added to a commercial auto policy or a business owners policy, and it sits naturally alongside your workers compensation and general liability as part of a complete business program. Because appetite and pricing for this coverage differ from one carrier to the next, an independent agency can compare options across multiple carriers and structure the coverage alongside your existing liability so there is no overlap and no gap. The goal is straightforward: when someone drives for your business, the business is not left exposed.
Frequently asked questions
Does my commercial auto policy already include hired and non-owned auto?
Not always. Many policies are built around owned vehicles only. It is worth confirming that non-owned and hired use is actually listed on the policy rather than assumed, because the difference only shows up at claim time.
My employee has their own auto insurance. Doesn’t that cover work errands?
Their policy covers them, and it may respond first, but it does nothing for the claim against your business, and personal policies can restrict business use. Hired and non-owned auto exists precisely for the lawsuit that names the company.
What is the difference between hired auto and non-owned auto?
Hired auto covers vehicles your business rents or borrows, like the rental truck for a mountain job. Non-owned auto covers employees’ personal vehicles used for work errands. They are usually sold together as one endorsement.
How much does hired and non-owned auto coverage cost?
As an endorsement to a business policy, it is typically one of the smaller lines on the account. The exposure it closes is a vehicle liability claim, which prices in an entirely different universe. The actual cost depends on your operation.
Do delivery apps or mileage reimbursement change anything?
Reimbursing mileage does not transfer the liability, and regular delivery exposure can push you past what an endorsement is designed for into commercial auto territory. Describe how driving actually happens in your business and we will match the structure to it.
Not sure whether your team’s driving is covered? Send us your current business policy and we will check whether hired and non-owned auto belongs on the account, then compare your options across carriers. Request a quote or call or text (720) 604-0006.