What is Excess Non-Owned Auto?
Excess Non-Owned Auto insurance provides liability coverage when employees use personal or rented vehicles for company business. It acts as a secondary policy that kicks in after the driver’s personal auto insurance limits are reached. This coverage helps protect your business from lawsuits or claims if an employee causes an accident while driving a non-owned vehicle for work purposes.
Who Needs It
Businesses that rely on employees to use their own cars or rented vehicles for company tasks may need Excess Non-Owned Auto coverage. This includes:
- Sales teams using personal vehicles to visit clients
- Employees renting cars for business travel
- Staff running errands or deliveries using their own cars
Even if your business doesn’t own company vehicles, you could still be held liable for accidents involving employee-driven non-owned autos.
What It Typically Covers
This type of policy generally covers:
- Bodily injury and property damage liability if the employee is at fault
- Legal defense costs related to covered claims
- Excess liability above the employee’s personal auto policy limits
It does not replace personal auto insurance but adds an extra layer of protection for your business.
Common Exclusions and Limitations
Excess Non-Owned Auto policies often have exclusions such as:
- No coverage for physical damage to the employee’s vehicle
- No coverage if the vehicle is used for personal errands
- Coverage may not apply if the employee doesn’t carry valid personal auto insurance
Terms and exclusions vary by insurer, so it's important to review your policy carefully.
Factors That Influence Cost
Several factors can affect the cost of this coverage:
- Number of employees using non-owned vehicles
- Frequency and distance of business travel
- Type of business operations
- Claims history and overall risk profile
Insurers may also consider your company’s driver safety policies and procedures.
Proof of Insurance and Compliance
Having Excess Non-Owned Auto coverage can help meet client contract requirements or regulatory expectations. Proof of this insurance may be requested by clients, partners, or government agencies. Since rules vary by state, consult a licensed professional for guidance specific to your location.
How to Get a Quote
To explore your options and get a personalized quote, visit our online quote page.
Frequently Asked Questions
Does Excess Non-Owned Auto cover damage to the employee’s personal vehicle?
No, it only covers liability for bodily injury and property damage to others. It doesn't cover repairs to the employee's own vehicle.
Is this coverage required by law?
It’s not typically required by law, but some businesses and contracts may require it as part of their risk management practices.
Can it be added to a general liability policy?
Some insurers allow Excess Non-Owned Auto to be added as an endorsement to a commercial general liability policy. Availability depends on the provider.
What’s the difference between Hired and Non-Owned Auto coverage?
Hired Auto covers rented or leased vehicles used for business. Non-Owned Auto covers employee-owned vehicles used for company purposes. Many policies combine both.
Who is covered under this policy?
Typically, the business entity is the insured, not the individual driver. It covers liability the business may face due to employee use of non-owned vehicles.
Still have questions? Talk to a local insurance expert.