Blog Content
Why Your Business Needs More Than Just Commercial Auto Insurance
Hired non-owned auto insurance (HNOA) protects your business when employees use their personal vehicles for work, or when you rent, lease, or borrow vehicles for business purposes. If your employees drive for work-related tasks or your business relies on vehicles it doesn't own, HNOA coverage fills critical gaps that standard commercial or personal auto policies don't cover.
Quick Answer: What is HNOA?
- Hired Auto Coverage: Protects your business when using rented, leased, or borrowed vehicles for work.
- Non-Owned Auto Coverage: Covers liability when employees use their personal cars for business tasks.
- Key Protection: Covers bodily injury and property damage to third parties, not damage to the vehicle being used.
- Typical Setup: Added as an endorsement to a General Liability or Business Owner's Policy (BOP).
- Who Needs It: Maine businesses whose employees run errands, visit clients, make deliveries, or rent vehicles for business travel.
Many Maine business owners mistakenly believe their commercial auto policy covers all business driving. It doesn't. Commercial auto only covers vehicles your business owns. Personal auto policies typically exclude coverage when a vehicle is used for business purposes.
This creates a dangerous gap. If your employee in Wells crashes their personal car while picking up supplies, or if you rent a van in Kennebunk for an event and cause an accident, your business could face devastating financial liability without HNOA coverage.
Under Maine law, an employer is responsible if an employee is negligent while in the course of employment when an accident occurs. This applies whether the vehicle is owned by your business or not. For Southern Maine businesses in Biddeford, Ogunquit, and surrounding communities, this isn't just a theoretical risk; it's a daily reality.
What is Hired and Non-Owned Auto (HNOA) Insurance?
Does your business use vehicles it doesn't own? An employee picking up supplies in their car, a rented van for a delivery, or a borrowed truck for a project all create liability. Hired non-owned auto insurance (HNOA) is designed to protect your business from these specific risks.
HNOA provides liability protection for your business assets when third-party claims arise from accidents involving vehicles you don't own. If someone is injured or their property is damaged in an accident caused by a hired or non-owned vehicle being used for your business, HNOA helps cover the costs of bodily injury and property damage.
Hired and non-owned auto liability ranks among the top risks for many organizations, yet it remains one of the most underestimated exposures. Many Maine business owners simply don't realize they need this coverage until it's too late.
Defining 'Hired' vs. 'Non-Owned' Vehicles
The name "hired and non-owned" can sound confusing, but the distinction is straightforward. According to standard insurance industry definitions, these terms have specific meanings in commercial insurance.
Hired autos are vehicles your business leases, rents, or borrows for business use. When you rent a car for a business trip to Portland or lease a van for temporary deliveries in Wells, you're using a hired vehicle. Vehicles hired or borrowed from your employees or partners generally don't count as hired autos under standard policies.
Non-owned autos are personal vehicles owned by your employees, partners, or volunteers that are used for company business. This is where many Maine businesses have unrealized exposure. When your employee drives their car to visit a client in Kennebunk or make a delivery to Ogunquit, that's a non-owned auto situation. This coverage fills the gap between your employee's personal policy and your business liability.
Who Needs HNOA? Scenarios for Maine Businesses
If your Maine business operates with any flexibility about who drives what vehicle, you probably need Hired non-owned auto insurance. Small and medium-sized businesses across Southern Maine face this exposure daily.
- Caterers in Kennebunk who rent vans to transport food and equipment.
- Contractors in Wells whose employees use personal trucks for supply runs.
- Consultants in Biddeford who drive their own cars to client meetings.
- Food delivery services in Ogunquit whose drivers use personal vehicles.
- Salespeople who travel to meet prospects throughout Southern Maine.
- Any business where employees run errands or rent vehicles for business travel.
In each case, if an accident occurs during a work-related task, the business can be held liable.
Core Coverages and Critical Exclusions
Hired non-owned auto insurance is a liability policy that protects your business from financial losses when you are sued over an accident involving a hired or non-owned vehicle.
What HNOA covers:
- Bodily injury liability for third parties injured in an accident.
- Property damage liability for property damaged in an accident.
- Legal defense costs, including attorney's fees, court costs, and settlements, even if the claim is baseless.
What HNOA does not cover:
- Damage to the hired or non-owned vehicle itself. For a rental, you'd need the rental company's damage waiver. For an employee's car, their personal collision coverage would apply.
- Employee injuries. These are covered by your Workers' Compensation Insurance.
- Personal use. An accident during an employee's commute or personal errands falls under their personal auto insurance.
HNOA vs. Other Policies: Closing the Coverage Gap
Think of your business insurance as layers of protection. Hired non-owned auto insurance exists to fill the gaps between those layers when it comes to vehicles your business uses but doesn't own. Understanding how HNOA works with your other policies is essential for protecting your Maine business from unexpected liability.
Hired Non-Owned Auto Insurance vs. Commercial Auto
If your business owns a vehicle, you need commercial auto insurance. This policy covers vehicles titled in your business's name, protecting you from liability and covering physical damage to those vehicles. For businesses in Wells, Kennebunk, and across Southern Maine, commercial auto is a foundational policy.
However, commercial auto policies only cover vehicles your business owns. They don't extend to a rental van for an event in Ogunquit or an employee's personal truck used for a supply run in Biddeford. That's the gap HNOA is designed to fill.
Hired non-owned auto insurance is typically an endorsement—an add-on—to your Commercial Auto Insurance Maine or general liability policy. It extends your business's liability protection to cover these non-owned vehicle situations. In insurance forms, you may see this reflected by adding coverage for "Symbol 8" (hired autos) and "Symbol 9" (non-owned autos).
The Role of an Employee's Personal Auto Policy
A common point of confusion is whose insurance pays when an employee has an accident in their personal car during a work errand. The answer is complex.
Most personal auto policies are designed for personal use and may exclude business-related driving, especially transporting goods. If your employee causes an accident while delivering products, their personal insurer might deny the claim, citing commercial use.
Even if the employee's policy provides some coverage, it acts as the primary insurance, paying first up to its limits. If damages exceed those limits, the injured party can sue your business for the difference.
This is where Hired non-owned auto insurance acts as your safety net. It provides secondary or excess coverage when the employee's personal policy is exhausted or denies the claim. Without HNOA, your business assets are at risk. You can't control your employees' personal policy limits, but you can protect your business from the consequences of a shortfall. For more on this, see our Full Coverage Automobile Insurance Guide.
The Risks of Being Uncovered: Liabilities for Your Maine Business
Skipping Hired non-owned auto insurance is a gamble with your business's financial stability and reputation. A single accident involving an employee driving their personal car for work could lead to lawsuits that drain your accounts or even force bankruptcy. In tight-knit communities like Wells, Kennebunk, or Biddeford, a damaged reputation can be difficult to repair.
Understanding Employer Liability and Maine Law
Under Maine law, your business can be held responsible for an employee's actions while they are working for you. This is called vicarious liability, and it applies whether your business owns the vehicle or not.
If your employee in Ogunquit causes an accident while running a work-related errand, the injured party can sue your business for damages. If the employee was acting within the scope of their employment, your business assets are on the line.
Another legal risk is negligent entrustment. If you allow an employee to drive for work when you knew (or should have known) they were a risky driver—perhaps due to a poor driving record or no insurance—your business could face even greater liability.
Since most personal auto policies exclude or limit coverage for business use, the injured party will likely turn to your business for compensation. Without Hired non-owned auto insurance, you face these claims unprotected. While understanding Maine Car Insurance Laws 2025 is important, state minimums for personal vehicles don't shield your business from this exposure.
Proactive Risk Management Strategies
Smart business owners actively manage risk instead of just hoping for the best. These steps, combined with proper insurance, create comprehensive protection.
- Create a written vehicle use policy. Clearly define business use, set rules for personal vehicle use, and establish accident reporting procedures.
- Implement driver screening. For any employee who drives for business, verify valid driver's licenses and run Motor Vehicle Record (MVR) checks annually.
- Require proof of adequate personal insurance. We recommend employees carry limits higher than Maine's minimums—for example, $100,000/$300,000 in bodily injury coverage. Collect certificates of insurance annually.
- Establish a strict distracted driving policy. Prohibit employees from using cell phones while driving for business to reduce a major cause of accidents and liability.
- Offer defensive driving courses. These courses can reduce accident rates and may lead to insurance discounts.
- Encourage safe vehicle maintenance. Remind employees that vehicles used for work should be kept in good working condition.
- Review your coverage needs regularly. As your business evolves, so does your risk. Work with your agent to ensure your coverage remains adequate.
These strategies work with your Hired non-owned auto insurance and General Liability Insurance Maine to create a robust defense for your business.
Determining Your Hired Non-Owned Auto Insurance Needs
Figuring out how much Hired non-owned auto insurance your Maine business needs requires a close look at your operations. A catering company in Kennebunk has different needs than a consulting firm in Wells. The key is to honestly assess your exposure: How often do employees use personal vehicles for work? Do you rent vehicles? Are they making short trips around Biddeford or longer drives?
Factors That Influence Your HNOA Premium
Several factors affect the cost of your Hired non-owned auto insurance. Understanding them helps you see what drives your premium.
- Number of employees who drive for work and their driving records.
- Frequency and type of vehicle use, such as mileage and whether goods are transported.
- Your business industry, as some sectors like delivery services have higher risk.
- Your claims history, where a clean record demonstrates good risk management.
- Your chosen coverage limits, as higher limits provide more protection at a higher cost.
- Location, as operating in busier areas can influence rates.
For more context on business insurance costs, see our guide on Maine Business Liability Insurance Cost.
How to Choose the Right Hired Non-Owned Auto Insurance Limits
Choosing the right coverage limits is about protecting your business's financial future. While Maine doesn't mandate specific HNOA limits, the state's minimum auto liability requirements ($50,000 per person, $100,000 per accident, $25,000 for property damage) are published by the Maine Bureau of Motor Vehicles and are far too low to protect a business from a serious claim.
The real question is about asset protection. Could your business survive a $500,000 lawsuit? A million-dollar claim? Many small businesses in Southern Maine start with limits of $300,000 to $500,000, but a $1,000,000 combined single limit offers more robust protection.
For businesses with significant assets or higher exposure, a commercial umbrella policy is a smart investment. It provides an extra layer of protection above your HNOA and other liability policies.
Also, check for contractual requirements. Some clients may require you to carry specific minimum insurance limits. There is no single "right" answer, but there is a right answer for your business based on your unique situation. For more insights, check out our guide on Comprehensive Auto Liability Insurance.
Frequently Asked Questions about HNOA
Let's tackle some of the most common questions we hear from Maine business owners about Hired non-owned auto insurance.
Can I get Hired and Non-Owned Auto Insurance as a standalone policy?
No, HNOA is not typically sold as a standalone policy. It's an endorsement, or add-on, to an existing commercial policy you already have, such as your General Liability policy or a Business Owner's Policy (BOP). This approach streamlines your insurance and is often more cost-effective.
Does HNOA cover damage to the car my employee is driving?
This is a crucial point: no, it does not. Hired non-owned auto insurance is strictly a liability policy. It protects your business from financial responsibility for bodily injury and property damage to other people.
It does not cover physical damage to the vehicle being driven. If it's a rental car, you would rely on the rental company's Collision Damage Waiver. If it's an employee's personal car, their own collision or comprehensive coverage would handle the repairs, subject to their deductible.
What if an employee gets in an accident while commuting to work?
If an employee has an accident during their regular daily commute, your business's Hired non-owned auto insurance typically won't cover it. HNOA only applies when the vehicle is being used for actual business purposes—running errands, visiting clients, or making deliveries.
Commuting is generally considered a personal activity. In a commuting accident, the employee's personal auto insurance policy would be the one to respond. This distinction is important to communicate to your team to avoid any confusion.
Secure Your Business Beyond Your Owned Fleet
Your business deserves protection that goes beyond the obvious. That's what Hired non-owned auto insurance delivers for Maine businesses—a safety net for risks many owners don't realize they're taking.
Whether you're running a catering company in Kennebunk, a contracting business in Wells, or a consulting firm serving clients in Biddeford and Ogunquit, you're exposed the moment an employee uses their personal vehicle for a work task. This isn't about fear; it's about smart business planning.
At Sevigney-Lyons Insurance Agency, we've spent decades helping Southern Maine businesses steer these exact challenges. As your local neighbors, we understand the unique needs of businesses in our communities and work with them daily to find the right solutions.
Many business owners assume their existing policies cover these situations, only finding out otherwise after an accident when the financial consequences can be devastating. We don't want that to happen to you. We take the time to assess your specific operations and craft a custom coverage plan that fills the gaps.
Don't leave your business exposed to preventable risks. Let's have a conversation about your coverage and make sure you're protected—not just for the vehicles you own, but for every vehicle that keeps your business moving forward.
Get a free quote for your Commercial Auto Insurance in Maine
