Why Hired and Non-Owned Auto Coverage Is Critical for Tree Service Companies

What Is Hired and Non-Owned Auto Insurance and Why Do Tree Services Need It?

Tree service companies rely heavily on vehicles to move crews, equipment, and debris between job sites every day. While most operators understand the need for commercial auto insurance on company-owned trucks, bucket trucks, and chippers, many overlook a critical gap that exists when employees use personal vehicles for work purposes or when the company rents or borrows vehicles it does not own. Hired and non-owned auto insurance fills this gap, and for tree services, the exposure is larger than most owners realize.

Non-owned auto liability covers your company when an employee driving their personal vehicle on company business causes an accident. Hired auto coverage addresses the other side of this gap by providing liability protection when your company rents, leases, or borrows a vehicle.

The cost of hired and non-owned auto coverage is remarkably low relative to the exposure it addresses.

The premium is negligible compared to a single liability claim arising from an uninsured auto accident.

When Do Non-Owned Auto Exposures Arise in Tree Care Operations?

In the tree care industry, employees driving personal vehicles for work purposes happens more frequently than you might think. A crew leader drives their personal truck to pick up parts for a chainsaw. A climber uses their own vehicle to meet the crew at a remote job site because the company truck was already full. A sales estimator drives their personal car to meet a homeowner for a bid. An office manager runs to the supply house for safety glasses and hearing protection.

In every one of these scenarios, if that employee causes an accident while performing a work-related task, the injured party can and will sue your company in addition to the employee. Without non-owned auto coverage, your company faces that lawsuit with no insurance response.

The legal theory behind this exposure is respondeat superior, which holds that an employer is liable for the negligent acts of employees performed within the scope of their employment. It does not matter that the vehicle belongs to the employee. It does not matter that the employee has their own personal auto insurance. When the injured party's attorney discovers that the driver was performing a work task at the time of the accident, your tree service company becomes a defendant. The employee's personal auto policy provides primary coverage for the employee, but it does not extend liability coverage to the employer.

Storm Season Amplifies the Risk

Storm damage response is when the HNOA exposure is particularly acute. After a major ice storm, windstorm, or hurricane, tree services mobilize every available resource to clear roads, remove hazard trees, and restore access to homes and businesses. During these surge periods, employees who normally ride in company vehicles may drive personal trucks to scattered job sites across a wide area. Additional vehicles may be rented to supplement the fleet. The urgency of storm response means less oversight of driving assignments, longer hours leading to fatigued driving, and unfamiliar routes through debris-strewn roads. This is exactly when an accident is most likely and exactly when HNOA coverage proves its value.

When Does Hired Auto Coverage Come Into Play?

Hired auto coverage provides liability protection when your company rents, leases, or borrows a vehicle. Tree service operations create frequent hired auto exposures that many owners do not recognize as uninsured gaps.

Each of these situations puts your company behind the wheel of a vehicle that is not on your commercial auto policy, and without hired auto coverage, any accident involving that vehicle has no insurance backing for your company.

Why Won't Your Other Policies Cover These Gaps?

Some tree service owners assume that their general liability policy will step in for auto-related claims. This is incorrect. The standard commercial general liability policy contains an absolute auto exclusion that eliminates coverage for bodily injury or property damage arising out of the ownership, maintenance, or use of any auto. This exclusion is ironclad and applies regardless of the circumstances. If the injury involves a vehicle, your general liability policy will not respond.

Other business owners believe that requiring employees to carry personal auto insurance with minimum limits solves the problem. It does not, for two reasons. First, most personal auto policies carry state minimum limits that are wholly inadequate for a serious injury accident, often $30,000 per person and $60,000 per accident in many states. A single traumatic injury from a vehicle accident can easily generate claims exceeding $500,000. Second, the employee's personal policy does not cover your company as the employer. You need your own coverage responding on your company's behalf.

Your commercial auto policy covers vehicles listed on the policy and, depending on the endorsement, scheduled vehicles. An employee's personal car is neither listed nor scheduled. A rented crane is not on your policy. Without HNOA, these vehicles represent completely uninsured exposure for your business.

How Should You Structure HNOA Coverage and Manage the Exposure?

The limits on your hired and non-owned auto coverage should match your commercial auto liability limits, which for most tree service companies should be at least $1 million combined single limit. If you carry a commercial umbrella or excess liability policy, confirm that it extends over HNOA coverage just as it does over your scheduled commercial auto vehicles. An umbrella that excludes hired and non-owned auto creates an asymmetric gap in your liability tower that could prove catastrophic in a serious accident involving an employee's personal vehicle.

Controls for Non-Owned Vehicle Use

Implementing proper controls around non-owned vehicle use strengthens both your insurance program and your risk management posture. Require all employees who may drive personal vehicles for work purposes to provide proof of personal auto insurance with limits of at least $100,000 per person, $300,000 per accident, and $100,000 property damage. Run annual motor vehicle record checks on every employee, not just those assigned to company vehicles. Establish a written policy defining when personal vehicle use for work is authorized and by whom. These steps demonstrate to your insurer that you actively manage the non-owned auto exposure rather than ignoring it.

Tracking Hired Vehicles

For hired vehicles, maintain a log of every rental, lease, or borrowed vehicle your company uses throughout the year. Report this information to your insurer at each renewal so your hired auto coverage is priced accurately and your carrier is aware of the exposure. If you regularly rent cranes, specialized haulers, or heavy equipment that requires CDL operators, discuss these exposures specifically with your agent to ensure your HNOA coverage applies without restriction.

Subcontractor vehicle use creates another layer of complexity. When your tree service hires subcontract climbers or ground crews who bring their own vehicles to your job sites, you need to verify that they carry adequate auto liability limits on their own policies. However, even with certificates of insurance from subcontractors, your company can still face vicarious liability claims. Hired and non-owned auto coverage provides a backstop when the contractual risk transfer from subcontractor agreements proves insufficient.

The bottom line for tree service companies is straightforward. If any employee ever drives a personal vehicle for any work-related purpose, or if your company ever rents, leases, or borrows a vehicle, you need hired and non-owned auto coverage. The premium is minimal, the protection is essential, and the alternative, facing a six or seven-figure liability claim with no insurance response, is a business-ending risk that no tree service should accept. Ask your insurance agent to confirm that HNOA coverage is included in your current program, and if it is not, add it immediately.