There are many different types of liability insurance out there, and it can take a lot of work to keep them all straight. In this article, we’re going to talk about NOHA insurance, also known as non-owned and hired auto liability insurance. This is the type of insurance that covers you if you get into an accident while driving a car that you don’t own. We’ll talk about what NOHA insurance covers, how it works, and why you might need it.

 

Hired and non-owned auto insurance (HNOA) covers commercial liability expenses triggered by accidents involving hired (e.g. rental cars) or borrowed vehicles (e.g. employee-owned) for business use.

 

While some home healthcare agencies may occasionally own a fleet of vehicles available to their employees for transportation to and from each patient, it is far more common for employees to use their own personal vehicles for company business. As a result, many home healthcare business owners mistakenly believe that they do not need their own insurance coverage since they have no “owned” autos to protect. However, the fact is that business entities still face auto liability exposures from non-owned autos, which their employees regularly use in the performance of their job duties. Almost every operating business entity has a liability exposure for non-owned and hired auto liability (NOHA), and home health care providers are no exception.

 

Accident claimants often seek recovery from as many sources as possible when they have suffered a property loss or medical injury from an auto accident. As a result, it is not uncommon for businesses to be named in a claim or sued based on non-owned auto liability exposure when their employee becomes involved in an auto accident. When it comes to utilizing vehicles for business and work activities, an employer can be held responsible for the actions of its employees during the course of their job performance. Employers could also be held accountable for their own negligence in association with the operation and use of the vehicle.

 

As a type of small business insurance, HNOA can help cover property damage or bodily injury that your business caused to someone else in an accident. HNOA includes two different types of coverage.

 

Small businesses that frequently rent cars for business travel, lease vehicles for long-term periods, or ask employees to use their personal vehicles for business errands are good prospects for hired and non-owned car insurance. So are those that often rely on employee vehicles during peak work periods.

 

 

Non-owned auto commercial insurance, done right, will cover your business for accidents involving an employee’s use of his or her own vehicle or one leased or rented by your business for use. But it won’t cover the employee’s personal liability. The employee will need to look to his own personal auto insurance for that coverage. And that particular policy will have a direct bearing on how vulnerable your home health care agency is to claims.

 

A personal auto policy has minimum required limits of liability coverage, depending on state law. But that level—that minimum mandated auto liability insurance—is typically very low and just a starting point for adequate coverage. If your employee has opted for the minimum, which many people do, an accident with a new car or multiple cars or an accident involving both property damage and serious injuries could far exceed the employee’s own liability coverage. That could expose your home healthcare firm to legal action by victims to cover the gap.

 

To complicate matters, if that driver is also carrying another of your employees to his or her job site and is injured, the driver would need to look to medical payments coverage, which isn’t mandated in some states. Even if insurers are required to offer the coverage, it may be possible for car owners to reject the medical expenses clause in writing, thereby removing it from their policy and premium. Additionally, if an employee is driving a vehicle he or she rented on his or her own—for example if the owned car is in the shop—the rental might not be covered under your business auto policy, even under the non-owned clause.

 

Before allowing employees to drive their own vehicles for work duties, take a look at their insurance policies—or better yet, have your insurance agent do so—to make sure their liability limits and medical payments coverage are adequate. You also need to establish a way to verify that coverage is current and continuous on an annual basis. Clarify the insurance gaps for employees so they fully understand the exposure they have to liability claims, where your commercial auto insurance will potentially kick in, and where they will be left paying “out of pocket”.

 

 

The term “hired auto” refers to any vehicles that you hire, rent, or borrow. To get coverage for these, you’ll need hired auto insurance, which applies to cars and trucks. So, if you or your employee are in a car accident while driving a hired, rented or borrowed vehicle for work, hired auto insurance can help pay for your liability costs.

 

Commercial auto insurance covers all vehicles that a business owns and that are used for work purposes. This is different to the HNOA policy, which only covers vehicles that are hired or borrowed by organizations for business use. Similar to a personal auto insurance policy, commercial auto policies typically provide: liability coverage, physical damage (comprehensive and collision) coverage, medical payments coverage should the driver or passengers need treatment, and coverage for damages if the at-fault party is uninsured or underinsured.

 

 

HNOA insurance helps cover liability expenses, including lawsuits, related to car accidents that occur in your personal, rented, or leased car that you use for business purposes.

 

Specifically, HNOA insurance coverage includes:

 

If you or one of your employees gets into an accident with their personal, rented or leased car and it damages another vehicle or someone else’s property, hired and non-owned auto insurance can help cover your legal costs.

 

HNOA insurance can help cover the cost of a lawsuit if a personal, rented, or leased vehicle driven for your business injures someone.

 

 

The HNOA policy does not cover physical repair expenses for the rented or employee-owned vehicle, nor does it cover any damage to property being transported within the hired or non-owned vehicle. So, if an employee rents a van to transport supplies to a business partner, and that employee gets into a road collision in which the van and the supplies were damaged, those physical damages would not be covered under a HNOA policy. Furthermore, the coverage does not cover accidents that happen during an employee’s commute or if they run a personal errand in the hired vehicle during or outside business hours.

 

 

If your business rents or borrows vehicles to do work, or if your employees use their personal vehicles on business, getting hired and non-owned auto coverage is important. It can help pay for any property damage that rented vehicles cause while being used for your business. It also covers vehicles used for your business if they cause bodily injury to another driver in a car accident. 

 

Companies that use hired and employee-owned vehicles for commercial purposes can mitigate some of their exposures by carrying out regular vehicle record checks to ensure their employees have no major driving infractions. They can also enforce strict driver age requirements, driving experience requirements, and so on. Finally, they can make the most of the booming telematics technology market to get accurate feedback on driver behavior.

 

Call us today to understand your insurance liabilities and commitments!