1851

Insurance is simultaneously one of the most daunting and essential components of franchising. When a business becomes a franchise, it stops being responsible for the coverage of just a single business and assumes legal liability for an entire system of businesses, each owned and operated by independent franchisees, often across states with varying insurance requirements.

Ensuring compliance across every unit can be a complicated and time-consuming pursuit for franchisors, and the potential cost of non-compliance is more than most franchisors can afford. That&rsquo;s why so many franchisors have partnered with <a href="https://www.certmgmt.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-hired-and-non-owned-insurance-is-essential-for-most-franchises-2706601" target="_blank" rel="nofollow" target="_blank">EZ CERT</a>, a franchise insurance support agency that proactively tracks and manages insurance certificates to ensure compliance across entire franchise systems.

One of the most common insurance products required by FDD&rsquo;s is hired and non-owned auto insurance. Hired auto refers to rented vehicles or car services, non-owned auto refers to a vehicle that is not owned by the business, such as an employee&rsquo;s car. Both products can cover employees in the case of an auto accident, making them most often associated with food delivery businesses, but as <a href="https://ezcertmgmt.1851franchise.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-hired-and-non-owned-insurance-is-essential-for-most-franchises-2706601" target="_blank" rel="nofollow" target="_blank">EZ CERT</a> Principal Doug Groves points out, hired and non-owned insurance is an essential product for any business that might require an employee to drive while working for any reason.

&ldquo;The minute an employee drives a car &mdash; theirs or yours &mdash; on the clock, you are exposed,&rdquo; Groves said.

Hired and non-owned auto insurance are primarily for employees who drive their own cars for a work-related purpose, but both products cover the employer, not the employee. A commercial automobile policy, with hired and non-owned included, is recommended if vehicles are owned in the business name. &nbsp;

&ldquo;When an employer has an employee drive for any reason, they are at least partially liable should an accident occur,&rdquo; Groves said. &ldquo;Hired and non-owned insurance covers that liability for the employers.&rdquo;

That coverage is particularly crucial for franchisors, who Groves says wear a big target in the eyes of attorneys.

&ldquo;If you&rsquo;ve got an employee who wrecks on the way to making a delivery, and they are at fault, they may be sued, but as soon as the attorney finds out they were working on behalf of a business, they are going to have dollar signs in their eyes,&rdquo; Groves said. &ldquo;That goes double for franchises because they&rsquo;ve got deeper pockets.&rdquo;

Premiums for hired and non-owned insurance vary depending on the amount of driving employees&nbsp;on the job. For businesses where employee driving is incidental, Groves says premiums are minimal, but for delivery services and other driving-heavy jobs, premiums can become a major expense.

&ldquo;The provider is going to take a good look at the exposure and charge an appropriate premium,&rdquo; Groves said.

That can pose additional complications for franchise brands who have some locations that deliver and others that don&rsquo;t deliver but might still require incidental coverage. Groves says that&rsquo;s one of the main reasons franchise brands turn to EZ CERT.

&ldquo;Some franchise brands have a lot of insurance requirements, and it can take a lot of time and effort to track each and every franchisee to make sure they have the right insurance coverage,&rdquo; he said. &ldquo;EZ CERT takes that off their plate, tracking every franchise location and ensuring compliance.&rdquo;

Like most insurance products, no business is legally required to maintain hired and non-owned insurance, but foregoing coverage poses a risk Groves says most franchisors can&rsquo;t afford.

&ldquo;Especially if you are in the business of delivering a product, but for any business that requires employees to drive, you can&rsquo;t afford to not have hired or non-owned insurance,&rdquo; Groves said.&rdquo;

Why Hired and Non-Owned Insurance is Essential for Most Franchises

1851 Franchise

EZ CERT’s Doug Groves on why most franchise brands can’t afford to forgo automobile insurance products

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

why-hired-and-non-owned-insurance-is-essential-for-most-franchises

Sola Salons

Sola Salons Targets Chicago for Strategic Franchise Growth

sola-salons-targets-chicago-for-strategic-franchise-growth

Melting Pot

Photo of Melting Pot white chocolate fondue

How Melting Pot Franchisees Drive Year-Round Success Through Strategic Promotions and Local Marketing

melting-pot-franchise-year-round-success

Crust Pizza Co.

Crust Pizza Co. - Technology Piece - CTO Nick Fontenot - May 2025 - 1851 Franchise

Crust Pizza Co. Builds the Future of Franchising With Tech-First Strategy

crust-pizza-co-technology-nick-fontenot-cto

Paris Baguette

Paris Baguette’s Recipe for Expansion: Leadership, Community and A Vision for 1,000 Cafés by 2030

paris-baguettes-recipe-for-expansion-leadership-community-and-a-vision-for-1000-cafes-by-2030

Seniors Helping Seniors®

Franchisee Spotlight with Billy and Anita Clark and Seniors Helping Seniors

Heart and Purpose: Couple Launch Seniors Helping Seniors® Franchise in Northern Arizona

heart-and-purpose-couple-launch-seniors-helping-seniors-franchise-in-northern-arizona

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands - 1851 Franchise

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands

doordash-acquistions-deliveroo-sevenrooms

Crumbl Franchise Investment - TSG Consumer Partners -  1851 Franchise

TSG Consumer Partners Takes Minority Stake in Crumbl, Signaling Franchise Growth Potential

crumbl-franchise-investment-tsg-consumer

Yum Brands Reports Strong Q1 Results with Big Boost from Taco Bell

yum-brands-reports-strong-q1-results-with-big-boost-from-taco-bell

QSR: McDonald’s Gains Momentum With Chicken Innovation, Value Deals and Franchisee Support

mcdonalds-franchise-recovery-chicken-strategy-value-deals-2025

The Future of Franchising: Trends and Predictions for 2025 and Beyond

the-future-of-franchising-trends-and-predictions-for-2025-and-beyond

Layoffs Surge to Pandemic-Era Highs, Opening Doors for Franchise Growth

layoffs-surge-to-pandemic-era-highs-opening-doors-for-franchise-growth

Restaurant Business: Crumbl Cools Its Expansion, Refocuses on Profitability

restaurant-business-crumbl-cools-its-expansion-refocuses-on-profitability

Franchisee spotlight image with Randy and Sandy Craft, Children's Lighthouse logo on blue background

The Crafts’ Successful Journey from New Parents to Children’s Lighthouse Franchisees

the-crafts-successful-journey-from-new-parents-to-childrens-lighthouse-franchisees

Franchisee spotlight image with photo of Robert Trujillo and UWRG logo on blue background

How Robert Trujillo Expanded His Construction Business With UWRG

how-robert-trujillo-expanded-his-construction-business-with-uwrg

District Taco Franchise Costs, Fees, Profit and Data for 2025

franchise-deep-dive-district-tacos-franchise-costs-fees-profit-and-data

The Ultimate Guide to Selling Franchises: Building Your Brand’s Growth Machine

ultimate-guide-to-selling-franchises

Why Hired and Non-Owned Insurance is Essential for Most Franchises

MORE STORIES LIKE THIS