Hired Auto
Coverage for vehicles rented or leased by the insured for business use, typically designated by Symbol 8 on the Business Auto form.
What It Is
Hired Auto coverage, designated by Symbol 8 on the Business Auto Coverage Form, applies to vehicles that the insured rents, leases, hires, or borrows for business purposes. This includes rental cars used by employees on business trips, short-term equipment rentals, and leased vehicles that are not owned by the insured.
Hired auto coverage is critical because most commercial general liability policies exclude auto-related claims, and the rental company's insurance typically provides only minimal coverage. Without Symbol 8 or Symbol 1 on the policy, a business has no coverage for liability arising from a rented vehicle.
Hired auto physical damage coverage is often added separately via endorsement CA 99 54, which covers damage to the rented vehicle itself. This eliminates the need for employees to purchase the rental company's collision damage waiver, saving significant money on frequent business travel.
Why It Matters for Brokers
Brokers who overlook hired auto coverage expose their clients to significant liability gaps. A single accident in a rental car can generate hundreds of thousands in liability claims, and the $15/day CDW from the rental counter provides only physical damage to the rental vehicle—not liability. Verifying hired auto coverage is a basic but frequently missed step in commercial auto reviews.
Real-World Example
A consulting firm with no owned vehicles rents cars 200 times per year for client visits. Each rental company CDW costs $28/day, totaling roughly $22,400 annually. By adding hired auto liability (Symbol 8) and hired auto physical damage (CA 99 54) to a Business Auto policy, the annual premium is $3,200—saving over $19,000 while providing $1M in liability coverage instead of just the rental vehicle's value.
Common Mistakes
- 1Confusing hired auto liability coverage with hired auto physical damage—they are separate and both must be explicitly added.
- 2Assuming a client with no owned vehicles does not need a commercial auto policy when they regularly rent vehicles for business.
- 3Failing to add the CA 99 54 endorsement for hired auto physical damage, leaving employees to purchase expensive CDW at the rental counter.
How brokerageaudit.com Handles This
brokerageaudit.com's Submission Intake asks about rental vehicle usage during the application process. If a client indicates regular vehicle rentals but no hired auto coverage is on the policy, the Policy Checker flags this as a coverage gap requiring broker review before binding.