Loading blog content, please wait...
By Sara Anglin - State Farm Insurance Agent
Nashville Contractors and Hired Auto Coverage: When You Need It Your crew member just ran to Lowe's on Dickerson Pike in his own truck to grab emergency...
Your crew member just ran to Lowe's on Dickerson Pike in his own truck to grab emergency supplies for a job in Germantown. On the way back, he rear-ends someone at a red light. The accident happened while he was working for you, doing a task you sent him to do.
His personal auto insurance might cover the damage. But if the other driver's medical bills start climbing and they decide to sue, guess whose business name ends up in the lawsuit?
Yours.
Standard commercial auto insurance covers vehicles your business owns. That's straightforward. But contractors in Nashville rarely operate with just company trucks. The reality looks more like this:
None of these situations are covered under a basic commercial auto policy. Your general liability insurance won't step in either—it specifically excludes auto-related claims.
Hired and Non-Owned Auto coverage fills this gap. "Hired" covers vehicles you rent or borrow. "Non-owned" covers employee-owned vehicles used for business purposes.
A plumbing contractor sends an apprentice to Ferguson on Lafayette Street three times a week for parts. The apprentice's personal auto policy has state minimum limits—$25,000 per person for bodily injury. That's Tennessee's legal floor, and plenty of young workers carry exactly that.
Now imagine that apprentice causes an accident with serious injuries. Medical costs blow past $25,000 fast. The injured party's attorney looks for deeper pockets and finds your established plumbing business.
Without non-owned auto coverage, you're defending that lawsuit with your own resources.
Here's another scenario that plays out regularly: A general contractor rents a flatbed from a local equipment rental company for hauling materials to a new build in Bellevue. The rental agreement includes some liability coverage, but it's basic and the deductible is steep. During delivery, the driver misjudges a turn and damages a parked car plus a mailbox.
The rental company's insurance might cover part of it. Your commercial auto policy won't touch it because you don't own the flatbed. Hired auto coverage handles exactly this situation.
Not every contractor faces the same exposure level. Your risk increases significantly if:
This includes site visits, supply runs, client meetings, or traveling between job locations. If they're on the clock and behind the wheel, you have exposure.
You rent vehicles or equipment with regularity. Spring 2026 construction demand in Nashville means more projects, which often means more rented equipment. Every rental creates potential liability.
You hire subcontractors who use their own transportation. While you might require subs to carry their own insurance, gaps in their coverage can still expose your business. Their policy limits might not match the severity of a serious accident.
Your work takes you across multiple counties. Projects in Williamson, Rutherford, or Wilson County mean more miles driven, more exposure on I-24 and I-40, and more opportunities for things to go wrong.
For most Nashville contracting businesses, hired and non-owned auto coverage adds somewhere between $200 and $800 annually to your commercial package. The exact number depends on factors like how many employees you have, how often you rent vehicles, and your claims history.
Compare that to the cost of defending a single lawsuit or paying out-of-pocket for an accident your policy doesn't cover. The math gets clear quickly.
Some business owners skip this coverage because they require employees to maintain personal auto insurance. That's a reasonable policy, but it doesn't eliminate your exposure. Personal policies often include business use exclusions. Even when they don't, their limits are typically lower than what you'd want protecting your company.
When you add hired and non-owned auto coverage, a few details matter:
Confirm the coverage extends to all vehicles. Some policies limit hired auto coverage to certain vehicle types. If you might rent a box truck, a cargo van, or a trailer, make sure your policy doesn't exclude any of them.
Check your limits against your other policies. Your hired auto limits should make sense alongside your general liability and umbrella coverage. A $500,000 hired auto limit looks thin if you're carrying $2 million in general liability.
Understand what counts as business use. An employee driving to a job site is clearly business use. An employee stopping for coffee on the way? Still probably covered. An employee taking a personal detour during work hours? That gets complicated. Know where your policy draws lines.
Document your requirements for personal vehicle use. Requiring employees to maintain certain coverage levels on their personal vehicles gives you an additional layer of protection before your policy kicks in.
Nashville's construction market keeps growing. More projects mean more vehicles moving around Davidson County, more materials getting transported, and more opportunities for accidents that create liability. Hired and non-owned auto coverage isn't glamorous, but it closes a gap that catches too many contractors off guard.