Vehicles are crucial to the daily operations of many businesses, both large and small. Many companies use hired or non-owned vehicles to carry out services and responsibilities, but managing these vehicles poses challenges from onboarding to insurance placement. And these challenges apply to any industry, including transportation, hospitality, education, healthcare, nonprofit and the shared/gig economy sector.
Without the right insurance coverage, these businesses could be on the hook for accidents, injuries, property damage or other exposures if an incident occurs.
Understanding HNOA intricacies
Hired or non-owned auto (HNOA) liability ranks among the top risks for many organizations, yet it is one of the most neglected and underestimated exposures.
HNOA liability insurance covers the business’ liability expenses for accidents involving vehicles that are not owned by the company but are used for work purposes. This includes any hired vehicles that the business leases or rents, as well as cars belonging to employees that are used for work purposes.
In the event of an accident, the first line of defense is the driver’s personal insurance, which will insure against individual liability for bodily injury or property damage to the other party. But not all drivers’ personal insurance is sufficient. For example, with the rise of gig economy workers, more personal insurance policies contain limitations or exclusions when a vehicle is used to generate income or used for business purposes. Other insurers may sharply cut personal policy liability limits for drivers operating vehicles for their employers. If a serious claim outstrips the individual’s insurance policy, victims or their lawyers will try to hold the business accountable for the actions of its employees or volunteers.
That is when HNOA liability insurance steps in, to financially protect the business if an employee or contracted third party is legally responsible for an accident that results in property damage, injury or death while operating for the business purpose of the company. Designed to compensate third parties, HNOA insurance is typically added as a rider or endorsement to a business’ existing general liability or commercial auto policies. Additional policies are available to protect against other types of losses, such as theft of items from a non-owned vehicle and physical damage to the employee’s or contracted party’s vehicle while in use for the business.
However, implementing these policies is not always easy. Onboarding HNOA into a fleet involves meticulous documentation and compliance checks, including making sure drivers have the necessary qualifications, licenses and training required to operate the vehicles. Third-party vendors providing their vehicles may have to show evidence insurance, background checks, drug screenings and other compliance requirements to the business contracting with them.
In addition, businesses must navigate regional, national and international compliance requirements for HNOAs, stay abreast of regulations and changes, and be able to balance the cost considerations for the coverage against factors such as driver behavior, driver history, vehicle conditions and accident records.
Consider technology-driven solutions to manage HNOA fleets
Leveraging a technology-driven solution for managing HNOA fleets can help businesses navigate these HNOA complexities. Such options can streamline the onboarding process by automating documentation and compliance checks, reduce administrative burdens and enhance the accuracy of records, ensuring that every driver and vehicle meets the necessary criteria.
Platforms can also help businesses address the various HNOA insurance intricacies by providing real-time access to insurance data, empowering them to make informed decisions. For example, HUB’s proprietary platform, HUB Drive Online, provides users the capabilities to onboard drivers, conduct compliance checks, monitor driver behavior and imbed insurance.
It also pushes telematics and collision detection into first notice of loss and imbeds usage-based insurance on trips, miles or revenue and even deducts these business costs from settlement payments to contracted parties. By centralizing data and providing a user-friendly interface, businesses can display their commitment to safety and compliance, potentially positively influencing underwriting decisions and reducing insurance costs while improving the bottom line.
Contact HUB International’s transportation insurance experts to learn more about managing HNOA fleets and the technological solutions to help make insurance management easier.