Here is how a typical night works at a mid-sized commercial cleaning company. A crew lead finishes a medical office at 9:40, loads two cases of supplies and a backpack vacuum into her own Honda, and drives eleven minutes to the next account. She's on the clock. She's carrying company property. She's going where the company told her to go. And when she runs a red light on the way, the person she hits doesn't sue her. They sue the company whose name is on the invoice.
Why the employee's personal policy isn't the answer
Most owners assume the employee's personal auto insurance will handle it. Three problems with that:
- Business-use exclusions. Many personal auto policies exclude or limit coverage when the vehicle is being used for work — and driving between job sites with company supplies is work.
- Personal limits are low. Tennessee's minimum is $25,000 per person in bodily injury. A serious injury claim will exhaust that in the first hospital bill, and the plaintiff's attorney will look for the deeper pocket.
- Vicarious liability. Under the doctrine of respondeat superior, an employer is liable for an employee's negligence in the course of employment. The company is a defendant whether or not the employee's policy pays a dollar.
What hired and non-owned auto covers
Non-owned auto liability protects your company when an employee uses their own vehicle on company business and causes injury or property damage. Hired auto liability covers vehicles you rent or borrow — the U-Haul for a floor-stripping job, the loaner van while yours is in the shop. Together they're called HNOA, and they're usually added as an endorsement to your general liability or commercial auto policy for a few hundred dollars a year.
What HNOA does not do: cover damage to the employee's own car (that's still their collision coverage), or replace a commercial auto policy on vehicles you actually own. If you have vans with your logo on the side, you need commercial auto. If your crews drive their own cars, you need HNOA. Most cleaning companies need both.
Why it gets left off
Because nobody asked. A broker quoting a janitorial account collects payroll, revenue, and a vehicle schedule. If the vehicle schedule says "none," the auto conversation ends there. The question that should follow — how do your crews get from building to building? — is the one that reveals the exposure, and it's not on the application.
What underwriters want to see
HNOA is inexpensive, but carriers do want evidence that you manage the risk. A written policy requiring employees who drive for work to carry personal auto insurance with limits above the state minimum. Motor vehicle record checks at hire and annually. A mileage reimbursement practice (which also helps with wage-and-hour compliance). None of it is burdensome, and all of it moves the pricing in your favor on both the auto line and the umbrella above it.
A cleaning company with thirty employees and no company vehicles is, functionally, a thirty-vehicle fleet it doesn't control. Insure it like one.
