Hired and Non-Owned Auto Insurance

When is a California employer liable for a crash in an employee’s own car?

When the employee was acting within the scope of employment, which the going-and-coming rule and its exceptions decide. An ordinary commute is outside the scope of employment, so the employer is not liable for a crash on the way to or from work. The exceptions put it back in. If the employer requires the employee to have a car available for work, or has come to rely on it, the drive to and from work is inside the scope of employment. That is the required-vehicle exception, and it is stated in the standard jury instruction, CACI 3725. In Moradi v. Marsh USA (2013) 219 Cal.App.4th 886, an employer that required its employee to use her car for client visits answered for a crash on her drive home, even though she planned personal stops. In Lobo v. Tamco (2010) 182 Cal.App.4th 297, the court held that rare use can be enough where the employer relies on the car being available. The special errand exception covers an errand on the way home, such as a bank deposit or a delivery, at the employer’s request. The other side of the line is Newland v. County of Los Angeles (2018) 24 Cal.App.5th 676: the employee regularly needed his car for work, but not on the day of the crash, and the employer was not liable. A substantial personal detour also takes the trip outside the scope. These are fact questions a jury decides, which is why a business should not plan on the defense.

Does the employee’s personal auto policy pay first, and what does it leave out?

Yes, it pays first. Under Insurance Code section 11580.9, the policy on which the vehicle is described as an owned automobile is primary, and any other policy is excess. The employer’s non-owned auto coverage therefore sits above the employee’s own policy. What the personal policy leaves out is the problem. Its limits may be the state minimum, which since January 1, 2025 is $30,000 per person, $60,000 per accident and $15,000 property damage under Vehicle Code section 16056. A serious injury claim exceeds those numbers, and the injured person then sues the employer for the rest. The personal policy may also exclude business use, delivery or livery. No statute writes that exclusion; it is a policy-form term that varies, so read the employee’s declarations and endorsements. One statutory exclusion does exist: a personal policy provides no coverage while the driver is logged on to a rideshare or delivery app unless it says so by endorsement, under Public Utilities Code section 5434. And the owner-liability caps in Vehicle Code section 17151 do not protect an employer whose liability comes through the employment relationship; the section excludes liability arising through master and servant.

What does hired and non-owned auto liability cover, and what does it not?

It pays on behalf of the business, and defends it, for bodily injury and property damage to others when the business is sued over a vehicle it does not own. The Department of Insurance’s commercial guide explains that a business auto policy assigns coverage by numbered covered-auto symbols. The hired symbol picks up vehicles the business rents, leases or borrows. The non-owned symbol picks up vehicles owned by employees and others and used in the business. Sonoma County’s contract template puts it in plain words: hired autos are vehicles the business rents or borrows, and non-owned autos are vehicles owned by its employees and contractors. The coverage is liability only. It does not repair the employee’s car, which is the employee’s own collision coverage. It does not pay for damage to a rented car, which is hired auto physical damage or the rental company’s damage waiver. It does not cover the employee’s own injuries, which is workers’ compensation. And it does not respond during app-based rideshare or delivery periods, which are the platform’s insurance. Business auto policies commonly carry a combined single limit rather than split limits, so one number applies to injury and property damage together.

What happens when an employee rents a car for work?

Two exposures, and two different answers. Liability to others for the employee’s driving is the hired auto side of this coverage. Damage to the rented car itself is either hired auto physical damage on the business policy or the rental company’s damage waiver. California’s rental rules live in Civil Code sections 1939.01 to 1939.37. Section 1939.01 makes the renter’s employer or coworker an authorized driver when engaged in business activity with the renter. Section 1939.03 lets the rental company charge the renter for collision damage up to the vehicle’s fair market value regardless of cause, and for theft only where it proves a failure of ordinary care. Section 1939.09 requires a damage waiver to remove that liability in full and voids most exceptions to it. It caps the daily charge by vehicle class with an inflation adjustment, and requires the counter to disclose that the waiver may duplicate the customer’s own insurance. The Department of Insurance’s October 2023 consumer alert warns that not every personal auto policy covers rentals, and that some cover only a substitute for a car in the shop. For a business that rents often, hired auto physical damage usually costs less than buying the waiver each time; for occasional rentals the waiver may be simpler. Either way, do not assume the employee’s personal policy is there.

Do delivery drivers, gig workers and rideshare trips change the picture?

An employee delivering your goods in their own car is the core exposure, not an exception. That drive is inside the scope of employment, and your non-owned auto coverage is what answers for it above the employee’s own policy. App-based work is a different legal category. Transportation network companies are governed by Public Utilities Code sections 5430 to 5445. Section 5433 requires the platform’s insurance to be primary. It sets at least $50,000 per person, $100,000 per incident and $30,000 property damage while the driver is logged on without a ride, and $1,000,000 from acceptance to drop-off. Section 5434 lets the driver’s personal policy exclude the entire logged-on period, and section 5432 requires the platform to tell drivers that in writing. Where this touches an ordinary employer is the employee who also drives for an app on the side. That employee’s personal policy may carry the app-period exclusion, which makes a business errand that looks like app work more likely to land on your coverage.

Do we have to reimburse employees for driving, and what does that have to do with insurance?

Yes, and less than people think. Labor Code section 2802 requires an employer to indemnify an employee for all necessary expenditures incurred in direct consequence of the discharge of duties, with interest and attorney’s fees on an award. The California Supreme Court in Gattuso v. Harte-Hanks Shoppers (2007) 42 Cal.4th 554 allowed three methods: actual expenses, a mileage rate, or a lump sum with the reimbursement portion identified. Under the mileage method the employee can prove the rate fell short of actual costs, and the employer must make up the difference. The IRS standard rate is a federal tax figure many California employers use as a proxy; it changed mid-2026 and is not a California requirement. The insurance connection is narrower than the reimbursement connection. Reimbursement records document business use, which an underwriter and a plaintiff both read. They do not decide liability. In Jorge v. Culinary Institute of America (2016) 3 Cal.App.5th 382, the court rejected the argument that mileage reimbursement showed a vehicle requirement, and reversed a verdict against the employer. The scope-of-employment tests above control.

Is an employee hurt while driving for work covered by workers’ compensation?

Yes, where the injury arises out of and in the course of employment, under Labor Code section 3600, and the comp policy is then the employee’s exclusive remedy against the employer. The going-and-coming rule applies in comp as well, and the required-vehicle exception was born there: in Smith v. Workmen’s Comp. App. Bd. (1968) 69 Cal.2d 814, a social worker required to furnish his own car was covered on the drive in. Comp reads the rule more broadly than tort law does, because doubts are resolved in the employee’s favor. So one crash can produce two claims. The employee’s injuries go to your workers’ compensation policy. The injured third party’s claim against the business is what hired and non-owned auto liability answers. Our workers’ compensation page covers the first policy.

Should we check driving records, and does the DMV Employer Pull Notice program apply to us?

Check them, and enroll if the statute reaches you. Vehicle Code section 1808.1 requires an employer to obtain a driver’s record before hiring and to enroll in the pull-notice system, with a report at least every 12 months. That duty applies only to the vehicles listed in subdivision (k): commercial license classes, endorsed class C licenses, certificated drivers such as school bus and ambulance, small for-hire passenger vehicles and taxis. An employee driving a personal car on sales calls is not on that list, and other employers can enroll voluntarily through the DMV. The DMV’s program page notes that from April 1, 2026 participating employers must conduct the program electronically. The underwriting reason is simpler than the statute. An insurer quoting non-owned auto liability asks who drives for the business and wants motor vehicle records, and the court in Jorge noted the employer there had never checked licenses, insurance or driving records. A written vehicle-use policy that requires personal auto insurance at stated minimums, with proof on file, is what the quote form is really asking about.

What limits do contracts and public agencies ask for?

A $1,000,000 combined single limit covering owned, hired and non-owned autos, with the agency named as additional insured, is the standard public-contract requirement. The Department of General Services’ contract insurance requirements ask for exactly that for the State of California, and Sonoma County’s Template 24 uses the same limit and wording. A business with no vehicles of its own meets that clause with hired and non-owned auto liability at that limit. General contractors and property managers write similar clauses into private contracts. Send the insurance article with the quote request, because the additional insured and primary wording have to be on the policy before the certificate can say so. Our certificate of insurance page explains that step, and our commercial auto insurance page covers the policy the coverage usually sits on.

What do we need to quote hired and non-owned auto liability?

Start a business insurance quote and tell us what the business does and whether it owns or leases any vehicles. If it does, the quote is a business auto policy with hired and non-owned added. If it does not, the coverage can attach to the general liability or businessowners policy or stand alone. Describe how employees use personal vehicles: deliveries, sales calls, client visits, bank and supply runs, how many people, how often and the usual radius. Send a driver list for anyone who drives regularly, with authorization to pull motor vehicle records, and your written vehicle-use policy if you have one. Add rental use for the year and whether you want hired auto physical damage, any contract or agency insurance requirements, current declarations and prior auto loss runs. Tell us about any rideshare, delivery-app or for-hire activity, which is quoted differently. Some accounts we can write directly and quickly. Others go to underwriting for approval, and those take longer. Either way you know before you decide.

Statutory references and case citations current as of September 2026 and specific to California. Policy descriptions are general; the covered-auto symbols and definitions come from the policy form, which controls.