What hired and non-owned auto (HNOA) liability is

Hired and non-owned auto liability, or HNOA, is business liability coverage for accidents in vehicles the business does not own: cars it rents or hires, and cars its employees or owners use for work, such as a personal car on a delivery or a bank run. It is commonly sold as a coverage on a commercial auto or business policy; California has no statute or Department of Insurance page that defines the form, so this definition describes how the coverage is commonly written. Two California statutes explain why the exposure exists.

Civil Code §2338 says a principal is responsible to third persons for the negligence of its agent in the transaction of the business of the agency. In practice an injured person can look to the business as well as the driver when an employee has a work-related crash. A personal auto policy is written for personal use and may exclude or limit business driving, so the business may have no policy of its own that responds unless HNOA is added. The legislature's site (leginfo) refused automated access on October 9, so this statute was read on the Justia mirror of the California codes; confirm the current wording on leginfo.

Labor Code §2802(a) requires an employer to indemnify an employee for all necessary expenditures or losses incurred in direct consequence of the discharge of his or her duties. When employees drive their own cars for work, mileage is the usual expense, which is one sign that the business has non-owned auto exposure. Reimbursing mileage satisfies the expense rule; it does not move liability for a crash away from the business. The employee's own policy has to meet at least California's minimum of 30/60/15 under Vehicle Code §16056 for policies issued or renewed on or after January 1, 2025, and a serious crash can exceed those limits.

HNOA does not cover vehicles the business owns, and it does not cover physical damage to a rented or employee car unless a separate coverage is added. Ask the agent which of those you have. A contract may also ask for HNOA on the certificate of insurance. See hired and non-owned auto insurance in California and commercial auto.