From the October 2001 issue of Entrepreneur

Your company and personal vehicles are all adequately insured--why worry about additional coverage for vehicles you don't own? Because if you ever rent a car or truck for business or if employees ever use their own vehicles for company business--even if they're just making a quick trip to the store for supplies--and there's an accident, you could face serious financial liability, says Chip Curley, a property and casualty agent with Sehnert, Lumbra, Robinson & Associates in Maitland, Florida.

Protect your company with hired and nonowned auto liability, which covers bodily injury and property damage caused by the hired or non-owned vehicle. It does not pay for physical damage to the vehicle itself; that's covered by the owner's insurance.

Hired auto coverage kicks in if you or one of your employees rents a vehicle in the company name that is then involved in a crash. Nonowned auto coverage applies if an employee has a wreck while driving his or her own vehicle in the course of performing duties for the company. Curley says they're typically bundled together and fairly inexpensive; expect to pay less than $100 a year for $500,000 worth of coverage, which can be added to your regular auto policy. If you haven't purchased a commercial auto policy because your company doesn't own vehicles, you can add the coverage to your general liability policy.

A bonus: If you rent cars occasionally, having hired and nonowned auto liability insurance may save you money because you can avoid buying the liability coverage from the rental company.


Jacquelyn Lynn is a freelance business writer in Orlando, Florida.