Non-owned auto coverage protects a business against liability claims arising from vehicles it uses but does not own. The Insurance Bureau of Canada describes a non-owned automobile policy as one that "protects the insured against third-party claims arising out of some other person using their own vehicle."
Why It Matters for Snow Contractors
Snow businesses often rely on vehicles they do not own: an employee's pickup, a rented truck for a big storm, or a worker driving between sites. If one of those vehicles is in an accident while doing your work, a claim can reach your business.
The vehicle owner's own auto policy is also part of the picture; non-owned coverage is aimed at claims against your business. It generally does not pay for damage to the non-owned vehicle itself. Forms and names differ by province and insurer, so ask a broker how it is written where you operate.
Some contracts ask for it by name. One Ontario township's winter maintenance request for proposals required non-owned automobile coverage of at least $2,000,000.
Example
An employee drives their own truck to salt walkways at a plaza and rear-ends another vehicle on the way. The other driver sues both the employee and your business. Non-owned auto coverage is the type of coverage designed for that kind of claim against your business.
Related Terms and Guides
General information only, not insurance or legal advice. Policy wordings differ; a licensed broker can explain how your own policy and contracts treat this.
Further reading: Insurance Bureau of Canada: Types of auto coverage; Insurance Bureau of Canada: Insurance glossary
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Frequently Asked Questions
Does non-owned auto cover damage to my employee's truck?
Generally no. It is aimed at liability claims against your business, not physical damage to the vehicle.
Do I need non-owned auto if my subcontractors use their own trucks?
Many contractors look at it and also require subcontractors to carry their own auto insurance. A broker can review your situation.