Some of the most consequential coverage gaps in commercial insurance do not arise from exotic risks. They arise from the most ordinary act in American business life: an employee getting into a personal car to run a work errand. A camp counselor drives to Walmart to pick up supplies. An office manager deposits checks at the bank. A maintenance worker borrows a van. Each trip creates an automobile liability exposure for the employer, and in the standard architecture of commercial policies, each trip falls into a gap between two policies.
The gap exists because of how auto policies allocate responsibility. A personal auto policy is written for personal use; when a vehicle is used for a business purpose, many personal carriers will deny or limit coverage, and in any event the policy rarely names or protects the employer. The employer’s commercial auto policy, meanwhile, covers scheduled and owned autos — and the employee’s car is neither. The result is an accident with an injured third party, a sued employer, and two insurers each pointing at the other.
Hired and Non-Owned Auto coverage, HNOA, exists precisely to close this seam. “Hired” autos are those the business rents or borrows; “non-owned” autos are those owned by employees but used in the business’s service. The coverage is usually added by endorsement to a general liability or commercial auto policy, and it is inexpensive relative to the exposure it absorbs — often a few hundred dollars of premium for a million dollars of liability protection.
The gap is especially dangerous for camps, but the logic generalizes. Any organization whose staff ever drive for work reasons carries the exposure: schools, nonprofits, home health agencies, contractors, professional offices. The exposure is also asymmetric in a way that rewards attention. The cost of the endorsement is trivial and certain; the cost of the uncovered claim is severe and merely probable. Insurance purchasing is at its best when it targets exactly this shape of risk.
The practical review is simple. Ask two questions of any commercial account: do employees ever drive their own vehicles on company business, and does the business ever rent or borrow vehicles? If either answer is yes, HNOA is not optional. It is the difference between a program and a pretense of one.
This article is adapted from Samuel’s original LinkedIn post, “Reviewed a Camp policy and it was missing”, published April 30, 2025. Read the original post on LinkedIn →