Hired & Non-Owned Auto: The Coverage Every Arkansas Contractor Forgets
- Gerald Burns
- Jun 9
- 8 min read
Hired & Non-Owned Auto (H&N) covers your business when you use a vehicle you don't own — a sub's truck, an employee's personal car, a rental box truck.
Your standard commercial auto policy only covers vehicles listed on the declarations page. Borrowed, rented, or subcontractor vehicles aren't covered without H&N.
Almost every AR contractor I quote is missing this coverage — because nobody asked the right question when the policy was written.
It's usually a small endorsement added to an existing commercial auto policy. The cost is minimal compared to the lawsuit it prevents.
If your business ever shows up at a job site with a vehicle that isn't on your policy, you need this.
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Most AR contractors think their commercial auto policy covers everything with four wheels and a job-site tie to their business. It doesn't. Commercial auto covers the vehicles you specifically schedule on the policy — VIN by VIN — and nothing else. Every other truck, van, rental, or borrowed vehicle that pulls into a job site under your business's name is a gap.
That gap has a name. It's called Hired & Non-Owned Auto, and the typical Arkansas contractor either doesn't have it or doesn't know they have it.
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1. What "Hired & Non-Owned Auto" actually means
The coverage has two halves, and both matter:
Hired Auto covers vehicles you rent, lease, or borrow for your business — a U-Haul box truck you rent for a one-day haul, a leased work van, an Enterprise pickup you take while yours is in the shop.
Non-Owned Auto covers vehicles owned by someone else that get used for your business — a 1099 subcontractor's pickup on the way to your job site, an employee's personal car they used to grab a part from the supply yard, your buddy's truck you borrowed to deliver lumber.
Together, Hired & Non-Owned (H&N) fills the gap between the vehicles you specifically listed on your commercial auto policy and the day-to-day reality of how AR contractors actually operate.
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2. Why Arkansas contractors specifically miss this coverage
The construction culture in AR is built on subcontractors. The NWA growth boom around Bentonville and Fayetteville, the post-storm roofing market in Little Rock and Conway, the framers and HVAC crews moving between job sites — almost none of it gets done with a single contractor and one truck on the road.
A typical AR roofer might have one box truck listed on their commercial auto policy but show up to a job with three 1099 subs in their own pickups. A small framer routinely sends a buddy's borrowed truck to grab a stack of OSB on a busy Friday. An HVAC tech sends his employee in her personal car to pick up a replacement coil from the supply house.
In every one of those scenarios, if there's an accident on the way to or from the job, the standard commercial auto policy doesn't pay — because the vehicle wasn't on the policy. The sub's or employee's personal policy may also deny the claim (more on that below). And you, the business owner, get named in the lawsuit anyway.
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3. A scenario every AR contractor should think about
You're an Arkansas roofer with one box truck on your commercial auto policy. A bad hail storm hits Conway. You take on three roofing jobs in the same week and hire two 1099 subs to keep up — both bring their own pickups.
Tuesday morning, one of your subs is driving from a supply yard back to the job site in his own truck. He pulls onto Highway 65, doesn't see a sedan in his blind spot, and sideswipes it. Sedan driver goes to the ER with a back injury.
Sedan driver hires a lawyer. The investigation finds:
The sub was driving in the course of your business
The sub's pickup wasn't on your commercial auto policy
The sub's personal auto policy excludes business use
Your commercial auto policy excludes vehicles not listed on it
The lawsuit names your business as a defendant. Without Hired & Non-Owned Auto, you're paying for the defense — and any judgment — out of pocket, while the carriers all point fingers at each other.
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Did You Know
Most personal auto policies contain a "business use exclusion" that voids coverage when the driver is operating the vehicle for work purposes other than commuting to a fixed office. If your sub or employee uses their personal car for your business and crashes, their personal carrier may legally refuse to pay the claim.
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4. What standard commercial auto WILL and WON'T cover
What it WILL cover:
The specific vehicles listed on your declarations page (by VIN)
Drivers operating those listed vehicles in the course of business
Liability, and — if you carry comp and collision — physical damage to those listed vehicles
What it WON'T cover without H&N:
A sub's personal pickup driven on the way to your job site
An employee's personal car they used to run a part to the project
A U-Haul or Enterprise rental you took for a one-day haul
A borrowed truck from a friend that you used for a business pickup
A loaner from the shop while your work truck is being repaired
That's the gap. H&N closes it.
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5. How Hired & Non-Owned Auto actually gets onto your policy
H&N is almost always added as an endorsement to an existing commercial auto policy — not a standalone policy. Most commercial auto carriers in Arkansas write it. The cost depends on:
Your industry class (contractors typically run higher than office-based businesses)
Your number of employees
Your annual receipts or payroll
Whether you primarily use 1099 subs
One trap to watch for: some commercial auto policies include a small amount of H&N by default — say, $100,000 combined limits. That number sounds fine until you remember a single ER visit with surgery can run $80,000 by itself. For a real AR contractor with multi-vehicle job-site exposure, you typically want H&N matched to your overall liability limits — often $1,000,000.
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Not sure if your commercial auto policy includes Hired & Non-Owned Auto coverage? Send me a picture of your declarations page and I'll tell you exactly what you have, where the gaps are, and what it'd cost to fix — no obligation. Call (763) 582-1888 or request a review at https://www.cityinsurancemn.com/contact. Licensed in AR, MN, WI, TX, NC, FL.
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6. The two questions every AR contractor should ask their agent
If you do nothing else after reading this, call your agent and ask:
"Does my commercial auto policy include Hired & Non-Owned Auto coverage?"
"What's the limit?"
If the answer to question 1 is "yes" but question 2 is something like "$100,000 combined," that's better than zero — but it's still likely too low for the exposure most AR contractors actually have. You usually want H&N limits matched to your overall liability limits, which for most contractor commercial auto policies means $1 million.
If the answer to question 1 is "no" or "I'm not sure," fix that this week. The endorsement is cheap. The lawsuit it prevents is not.
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Did You Know
Hired & Non-Owned Auto is LIABILITY only by default. It does not pay to fix the borrowed or rented vehicle itself. If you crash a rental U-Haul, H&N pays for the damage you caused to others; "Hired Physical Damage" — a separate endorsement — is what pays to fix the U-Haul. AR contractors regularly confuse the two.
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7. When AR contractors really need this — and when they might not
You probably need Hired & Non-Owned if:
You use any 1099 subcontractors who show up in their own vehicles
You ever rent box trucks, vans, or U-Hauls for hauling
You have employees who occasionally use personal cars for parts runs, supply pickups, or client visits
You're in any construction trade in Arkansas — roofer, framer, HVAC, electrician, plumber, hot-shot, snow removal, general contractor
You probably don't need Hired & Non-Owned if:
You're a one-person operation with one truck
You never use subs
You never rent or borrow a vehicle for business
That second category, in real life, is almost nobody.
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8. Q&A: What AR contractors ask me most about this
Q: I'm a one-person LLC with one truck. Do I really need this?
A: Maybe. The honest test is: have you ever picked up a load in a friend's truck because yours was in the shop? Rented a U-Haul for a big haul? Sent your kid's pickup to grab supplies because it was closer? If yes to any of those, you have non-owned exposure. The endorsement is cheap enough that for most one-person AR shops it's still worth carrying.
Q: My sub has his own commercial auto policy. Doesn't that protect me?
A: It protects him first. A lawyer suing after an accident will still name your business as a defendant — and your defense costs come out of your pocket unless your own H&N picks them up. The sub's commercial auto pays for his portion of the liability; H&N pays for your business's exposure as the contractor who hired him.
Q: Will adding H&N raise my premium a lot?
A: Generally no. It's one of the cheapest coverages relative to the risk it transfers. Your specific cost depends on your industry class, employee count, and receipts.
Q: What if I crash a rental U-Haul?
A: H&N pays for damage you caused to others — their car, their property, their injuries. It does NOT pay to fix the U-Haul itself. For that you need either Hired Physical Damage as a separate endorsement, or the rental company's damage waiver at the counter (usually overpriced relative to adding the endorsement on your policy).
Q: How do I find out if I already have H&N or not?
A: Look at your commercial auto declarations page. Search for the words "Hired Auto," "Non-Owned Auto," or "Employers Non-Ownership Liability." If you see those listed with dollar limits next to them, you have the coverage. If they're absent — or marked "Excluded" — you don't. If you can't tell, send the dec page over and I'll read it for you in five minutes.
Q: My subcontractors are required to carry their own coverage. Why do I still need this?
A: Because lawyers sue everybody with money. The sub's policy is the first line of defense, but your business gets pulled into the suit anyway as the contractor who hired the sub. H&N is what pays YOUR defense costs and any judgment against YOUR business — separate from whatever the sub's policy does or doesn't pay.
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About City Insurance MN. City Insurance & Financial Service Inc. is an independent insurance agency based in Plymouth, MN, licensed in AR, MN, WI, TX, NC, and FL. Agent Gerald Burns writes commercial auto and contractor insurance for Arkansas trades — roofers, framers, HVAC, plumbers, electricians, hot-shot truckers, and general contractors. Call (763) 582-1888 or visit https://www.cityinsurancemn.com to review your commercial auto policy or get a quote.
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