Commercial Auto vs. Hired and Non-Owned Auto Insurance: What’s the Right Coverage for Your Business?

When it comes to running a small business, having the correct insurance coverage is critical for business management since it protects your employees, assets, and processes. One of the most common sources of confusion is the type of automobile insurance required by your business, particularly when comparing commercial auto vs. hired and non-owned auto insurance (HNOA). Understanding these standards properly and understanding when to apply them might be critical to protecting your organization. With the help of this post, we will look at the best auto insurance for small business vehicles, explain the difference between commercial auto and HNOA insurance, and help you make a knowledgeable decision that benefits your company.

What Is Commercial Auto Insurance?

“Commercial auto insurance” is a type of coverage that is designed for businesses that utilize cars for work regularly. This insurance is very important for protecting your business from any costs or losses that may come from robbery, accidents, or other car-related events. This insurance is good for corporate cars, trucks, vans, and other vehicles.

The National Safety Council (NSC) says that the average cost of a deadly vehicle crash in the U.S. is $1.7 million. This includes medical expenditures, lost productivity, and legal fees. This amount includes the cost of hiring a lawyer. If your business needs transportation to provide services or move goods, or if employees use work cars, you need commercial auto insurance. A 2022 study by the National Association of Insurance Commissioners (NAIC) found that corporations that use work automobiles are 3.5 times more likely to get into an accident than those who use their own cars. This blog shows how important it is to have the right coverage.

What Is Hired and Non-Owned Auto Insurance (HNOA)?

Hired and Non-Owned Auto Liability Insurance (HNOA) covers automobiles used for commercial purposes but not owned by your company.  Vehicle liability insurance is another term for this type of coverage.  These automobiles include rental vehicles as well as personal vehicles used by personnel on your company’s behalf.  Its main job is to fill in the gaps that happen when someone uses their car or a rented car for business.

Statista says that more than 47% of small businesses in the US use their cars or rent them for work. This demonstrates that HNOA insurance is becoming more and more necessary. If an employee uses their automobile to do business for your company or hires a car for a work trip, HNOA insurance protects them from being sued. It covers injuries or damage to third parties that happen during business activities, but it doesn’t cover damage to personal or rented cars.

HNOA, or Hired and Non-Owned Auto Liability Insurance, is intended to cover your company if workers utilize automobiles for work purposes but do not own the vehicles. This category comprises circumstances in which persons hire a car or drive their vehicle for business purposes. Even though it is commonly referred to as “vehicle liability insurance,” its primary goal is to cover the risks connected with an employee operating a non-company vehicle.

Difference Between Commercial Auto and HNOA Insurance

Commercial car, hired auto, and non-owned vehicle insurance may seem the same, but there are big differences between the three forms of insurance. You may compare them in the following ways:

• Commercial Auto Insurance: Company-owned cars are covered by commercial auto insurance. Depending on the insurance, this coverage may include protection against accidents involving the business automobile, damage to the car, and other safety measures.

• Hired and Non-Owned Auto Insurance (HNOA): Hired and Non-Owned Auto Insurance (HNOA) is mainly used to cover liability for cars that the business does not own. This category includes vehicles that are privately owned or hired by employees. However, it only covers injuries and damages to third parties caused by the use of the vehicle and does not cover damage to the car itself.
  

Depending on how your workers use their automobiles for work, your organization may require one or both of these laws. You must understand these differences in depth.

Do I Need Commercial or Non-Owned Auto Insurance?

If your business has automobiles, you must acquire commercial auto insurance to protect yourself against the risks and liabilities involved with your transportation. However, if your company employs rental automobiles or staff vehicles for work-related activities, you will require leased and non-owned auto liability insurance (HNOA). In some circumstances, small firms may require both forms of coverage.

A study by Progressive Insurance found that 58% of small firms with employees acknowledged occasionally utilizing their automobiles for work-related activities. If you find yourself in this circumstance, you should have HNOA insurance to cover your business in the event of an accident.

HNOA insurance, for example, can protect your company from potential liability in the case of an accident if you own a small consulting firm and your staff occasionally rent automobiles for client meetings. If you have a fleet of automobiles to use for business or to make deliveries, commercial auto insurance will cover not only the cars themselves but also any accidents that happen while the firm is open.

Best Auto Insurance for Small Business Vehicles

When selecting the best auto insurance for small business vehicles, you should consider many factors, such as the size of your company, the type of vehicles you drive, and how frequently you use them for work-related activities. Businesses with a fleet of cars may expect to pay between $1,000 and $3,000 per year for commercial auto insurance for each vehicle, according to the Insurance Information Institute (III). This is the typical cost that business owners should anticipate incurring.

Insure Your Company provides several specialised insurance solutions to match the needs of small companies. We collaborate with major providers such as Hiscox, Chubb, and The Hartford to provide comprehensive and cost-effective coverage, whether you require corporate vehicle insurance or hired and non-owned automobile liability insurance.

We use a tailored approach to guarantee that your company gets the exact coverage it needs. If you want to save money without compromising coverage, try purchasing vehicle insurance in addition to other policies such as workers’ compensation or general liability.

Why Insure Your Company is Exactly What You Need

Insure Your Company, we recognize that each business is unique, particularly when it comes to the many types of automobile insurance policies available.  We take the time to understand your specific requirements and make recommendations for the finest insurance coverage, whether you’re searching for commercial car insurance, rental auto insurance, or non-owned auto insurance.  Our team collaborates with you to guarantee that your company is fully guarded and ready to manage any problem that may happen while traveling.

We have built relationships with leading providers like as Hiscox, Chubb, and The Hartford to deliver the most comprehensive plans available today.  By choosing our company, you are investing not just in insurance but also in a dependable partner that sincerely cares about your company’s long-term security and prosperity

Get the Right Coverage for Your Business

Understanding the difference between commercial car insurance and HNOA insurance can be difficult, but having the proper coverage is critical to protecting your company and its employees. If your business has vehicles, you must have commercial auto insurance. Hired and Non-Owned Auto Liability Insurance is a great choice if your employees drive their cars or rent cars for work.

Whether you need Hired and Non-Owned Auto Liability Insurance or full coverage for your company’s cars, we are dedicated to delivering the correct insurance for any type of business. Insure Your Company is ready to help you choose the right insurance for your business.

Protect your business on the road—Contact us today to find the right insurance!

Frequently asked questions

1. What is the difference between commercial auto and hired and non-owned auto insurance?
   Commercial auto insurance covers your company’s cars. Our hired and non-owned auto (HNOA) insurance covers corporate vehicles, such as Employee-owned and work-rented autos.
2. Does my small business need both commercial auto and HNOA insurance?
   Yes, if your company has automobiles and workers utilize them for corporate purposes, you will most likely need both. This guarantees that your firm is secured, whether an employee is using their own vehicle or a corporate van.
3. What does hired and non-owned auto insurance cover?
   HNOA provides liability coverage for non-owned vehicle accidents involving your business. Insurance covers third-party losses, medical bills, and legal fees, but not employee injuries or rental car damage.
4. What’s the difference between commercial auto insurance and hired and non-owned auto insurance?
   Commercial auto insurance may cover your company’s automobiles. Your firm may safeguard its rental and non-owned cars with insurance. Employee vehicles and leased cars utilized for work are two examples of this sort of vehicle.
5. Do I need hired and non-owned auto insurance if my employees drive their own cars for work?
   Yes, you must obtain HNOA insurance to protect your firm from any legal problems if workers use their personal vehicles for client meetings or other business-related activities.
6. What does commercial auto insurance usually cover for a small business?
   Commercial auto insurance covers all of the costs that come up when a company-owned car is used for work. This includes liability, accident, and medical bills.

Dan Levenson

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