Hired and Non-Owned Auto Coverage: Whose Name Is on the Title vs Whose Name Is on the Policy
The truck is titled to you. The policy names your LLC.
This is one of the most common setups we see on a contractor's commercial auto policy, and most of the time nobody has ever mentioned it.
Here is how it happens. You buy a truck. Financing it through the LLC is a hassle, so you sign for it personally and the title comes back in your name. The truck goes to work hauling tools and crew. Your agent adds it to the business auto policy, and that policy names Smith Excavating LLC.
Now the title says John Smith and the policy says Smith Excavating LLC. Those are two different legal parties. Under the law an LLC has a separate legal identity from its members, the same way a corporation is separate from the person who owns all the stock. Your policy knows the difference even if the day to day work does not.
That mismatch is fixable, and there is a specific endorsement built for it. But you have to know it is there.
What hired and non-owned auto coverage actually is
Commercial auto coverage is triggered by numbered symbols on your declarations page. Two of them handle vehicles your business does not own.
Symbol 8, hired autos
Symbol 8 covers autos your business leases, hires, rents, or borrows. The rental box truck for a one day move. The pickup you borrow from another contractor. Symbol 8 can trigger both liability and physical damage.
Here is the part that surprises people. Symbol 8 specifically excludes autos you lease, hire, rent, or borrow from your own employees, from partners in a partnership, from members of an LLC, or from anyone in their households. So if you borrow your foreman's trailer, symbol 8 is not what picks it up.
Symbol 9, non-owned autos
Symbol 9 covers autos your business does not own, lease, hire, rent, or borrow, but that get used for your business. This is the employee running to the supply house in their own truck. Symbol 9 does include vehicles owned by employees, partners, LLC members, and their households.
Symbol 9 is liability only. There is no physical damage under it.
The gap symbol 9 leaves wide open
Read this sentence twice, because it is the one that costs people money.
Symbol 9 protects the business. It does not give your employee insured status.
Say your office manager takes her own car to pick up supplies, hydroplanes, and takes out a guardrail. Symbol 9 responds for the company if the company gets named. Your employee is on her own. She owns the auto, and a permissive user does not get insured status on a vehicle they own themselves. Her personal auto policy is what stands between her and the claim.
That is one of five specific exceptions to permissive use in the business auto form. The other one worth knowing: if you borrow a vehicle from another business, the owner of that borrowed vehicle does not get insured status under your policy either.
The fix for the employee side is an endorsement called Employees As Insureds, form CA 99 33. It gives your employee insured status when they use their own vehicle on company business. Coverage sits excess over the employee's personal auto policy, so their policy responds first, and yours steps in if theirs does not respond to that particular loss.
One detail on that endorsement that matters on a jobsite. "Employee" is a defined term. It includes leased workers from a staffing firm. It does not include temporary workers, meaning someone brought in to fill in for a permanent employee on leave or to cover a seasonal push. If you run temp labor and they drive their own vehicles for you, that endorsement is not covering them.
If you run an LLC, this is probably your gap
Most of the contractors we work with are LLCs, and the owner drives his own truck. So this one lands more often than any other item on this page.
Partners in a partnership and members of an LLC do not get insured status under symbol 9 when they drive their own vehicle on company business. Symbol 9 makes their vehicle a covered auto, but the liability protection runs to the business, not to them personally.
Employees As Insureds does not fix this, because a member of an LLC is not an employee of it. There is a separate endorsement: Partners Or Members As Insureds, form CA 05 25. It does for partners and LLC members what CA 99 33 does for employees.
If you are a two member LLC and both of you drive personal trucks to jobs, ask whether this endorsement is on your policy. There is a good chance it is not.
The titling problem, and the endorsement that fixes it
Back to the truck titled in your name and insured under the LLC.
The endorsement built for this is Employee As Lessor, form CA 99 47. It works by turning the arrangement into what it actually is: you lease your personal vehicle to your business.
Three things have to be true for it to work:
- There is a real written lease agreement between you and the business.
- The lease has consideration. It can be any dollar amount, but an amount has to exist. A handshake does not qualify.
- The vehicle is described in the endorsement schedule.
Once it is in place, liability coverage is primary, and the vehicle can sit on the business auto policy even though the business does not own it and the title never changed hands.
There is a second option worth knowing: retitle the vehicle into the business name so the title and the named insured match. That is the cleanest version and sometimes the financing makes it impractical. Between the two, the point is the same. The titled owner and the named insured should not be strangers to each other when a claim comes in.
If you dropped your personal auto policy, read this part
A lot of small business owners put every vehicle they own on the business auto policy and let the personal auto policy go. It looks efficient. It opens a hole.
The business auto policy does not cover you for the personal use of a vehicle you do not own. Rent a car on a family vacation and there is nothing behind you, because the personal auto policy that would normally handle that no longer exists.
There are two endorsements here and they are built for different situations.
Individual Named Insured, form CA 99 17
This one extends coverage close to what a personal auto policy would give you, including for your resident spouse and resident family members, for the personal use of non-owned autos.
A misconception worth clearing up: this is not limited to sole proprietors. Plenty of sources say it is. What the form actually requires is that the person needing the coverage is a named insured on the declarations, that at least one private passenger type auto is scheduled on the policy, and that the individual does not carry a personal auto policy.
It also removes the fellow employee exclusion for that individual and their family members, and removes the pollution exclusion for private passenger type autos. Physical damage carries over to the non-owned auto if the scheduled private passenger auto has it, with a $500 cap on physical damage to a non-owned trailer.
What it will not do: cover autos owned by your family members, or a vehicle furnished to you for regular use. It is built for occasional non-owned use, not for a second regular vehicle.
It is generally added without an additional premium charge.
Drive Other Car, form CA 99 10
Drive Other Car is the version for larger operations, where you are furnishing company vehicles to executives or key employees who therefore do not own a car and do not carry personal auto coverage.
Individuals have to be listed by name in the endorsement schedule. Five coverages can be extended and each needs its limit shown in the schedule: Liability, Auto Medical Payments, Uninsured Motorist, Comprehensive, and Collision. Unlike CA 99 17, this one carries a premium charge.
Coverage runs to the person named and their resident spouse. Other resident family members are not covered unless you name them individually, which adds premium. The exception is auto medical payments and uninsured or underinsured motorist coverage, which do extend to resident family members without naming them.
Endorsement quick reference
| Form | Name | The gap it closes |
|---|---|---|
| CA 99 33 | Employees As Insureds | Your employee driving their own vehicle on company business has no insured status. Excess over their personal policy. |
| CA 05 25 | Partners Or Members As Insureds | Same problem for partners and LLC members, who are not employees. |
| CA 99 47 | Employee As Lessor | Vehicle titled personally but used by and insured under the business. Requires a written lease with consideration. |
| CA 99 17 | Individual Named Insured | Owner with no personal auto policy needs personal-use coverage on non-owned autos. Usually no extra premium. |
| CA 99 10 | Drive Other Car | Named executives furnished company cars who carry no personal policy. Premium applies. |
| CA 20 54 | Employee Hired Autos | Employee rents a vehicle in their own name for a business trip. |
| CA 20 01 | Lessor - Additional Insured And Loss Payee | Leasing company wants its interest protected on a leased vehicle. |
Availability and pricing vary by carrier and by state. Not every endorsement is offered on every policy.
General liability, workers comp, commercial auto, equipment - we package the whole program for contractors. Apply in about 10 minutes and we will get to work.
What hired and non-owned coverage will not do
Even done right, this coverage has edges. It is liability protection, and it is narrow in specific ways.
- Symbol 9 is liability only. There is no physical damage on a non-owned auto.
- Damage to a rented vehicle needs symbol 8 under physical damage, or the damage waiver from the rental company.
- Injuries to you or your own employee while driving a hired or non-owned auto are a workers compensation question, not an auto liability one.
- Personal errands outside the course and scope of employment are not business use.
- Tools and property stolen out of the vehicle belong on an inland marine or equipment policy.
One useful exception on rentals: if your own covered vehicle is out of service for breakdown, repair, servicing, loss, or destruction, and you use a non-owned vehicle as a temporary substitute, liability extends automatically. You do not need symbol 8 for that. You still need symbol 8 for physical damage. Renting a car after a flight is not a temporary substitute, because your vehicle was never out of service.
The five minute check on your own policy
Pull your commercial auto declarations page and work through this list.
- Find the covered auto symbols. Look for 8 and 9 on the liability line. If 9 is missing and anyone drives their own vehicle for you, that is a gap.
- Read the named insured exactly as it is printed. LLC or Inc, and spelled the way the state has it. A policy naming the wrong entity is a real reason carriers decline claims.
- List every entity you operate. The operating company, the equipment holding company, the real estate LLC. Each one that touches a vehicle should appear.
- Check the title on every truck against the named insured. Any vehicle titled to a person rather than the business needs either a retitle or CA 99 47.
- Ask who drives their own vehicle for you. Employees point to CA 99 33. Partners and LLC members point to CA 05 25.
- Ask whether any owner carries no personal auto policy. If so, CA 99 17 or CA 99 10 belongs in the conversation.
If you want a second set of eyes on it, send us the declarations page. This is a fifteen minute review and it is the kind of thing that only ever gets found before a claim or after one.
Frequently asked questions
What is the difference between hired and non-owned auto coverage?
Hired auto coverage, symbol 8, applies to vehicles your business rents, leases, hires, or borrows. Non-owned auto coverage, symbol 9, applies to vehicles your business does not own or rent but that get driven for your business, typically an employee's personal vehicle. Hired auto can carry both liability and physical damage. Non-owned auto is liability only.
Does Any Auto include hired and non-owned?
Symbol 1, Any Auto, is the broadest liability symbol and it applies to any auto your business uses, owns, hires, or borrows, including hired and non-owned exposures. Two things to keep in mind. Symbol 1 is a liability symbol only, so physical damage still runs off separate symbols. And symbol 1 does not give an employee or an LLC member insured status when driving their own vehicle. That still takes CA 99 33 or CA 05 25.
How does a non-owned auto policy work?
Non-owned auto coverage sits on your business auto policy and responds when someone drives their own vehicle for your business. The driver's personal auto policy is primary. Your business policy protects the business, and only protects the driver if you have added the endorsement that gives them insured status.
Can you have an additional insured on hired and non-owned auto?
The business auto policy has only one true additional insured endorsement, CA 20 01, and it is for a lessor on a leased vehicle. Requests to be named on someone's auto policy are usually handled through CA 20 48, Designated Insured, which formalizes in writing the vicarious liability coverage the policy already provides rather than adding new coverage.
Can my LLC insure a truck that is titled in my personal name?
Yes, with the right paperwork. The Employee As Lessor endorsement, CA 99 47, lets you lease your personally titled vehicle to your business and schedule it on the business auto policy. It requires a written lease with actual consideration. The alternative is to retitle the vehicle into the business name so the title matches the named insured.
Does my employee need their own insurance to drive their personal car for work?
Yes. Their personal auto policy is primary any time they drive their own vehicle, including on your business. Your business auto policy protects the business, and protects the employee only if you have added Employees As Insureds. Requiring proof of personal auto coverage from anyone who drives their own vehicle for you is a reasonable standard to set.
Get a second look at your commercial auto policy
None of this shows up until a claim does. That is exactly why it is worth twenty minutes now.
Send us your commercial auto declarations page and we will tell you which symbols you carry, whether your named insured matches how your business is actually set up, and which of these endorsements you are missing. We came from the trades we insure, so you will get a straight answer and not a sales pitch.
Call the Grit team at (801) 505-5500 or apply online and we will start the review.