Does My Restaurant Need Coverage to Deliver Food?


Today, more and more restaurants are offering delivery services to their customers. While this brings convenience to customers and helps restaurants, it also opens up new insurance considerations. Even if delivery drivers have their own auto insurance, restaurant owners can be held liable for accidents that occur while the drivers are working.


If your business has employees making deliveries, you should consider adding hired and non-owned automobile coverage to your insurance policies.


What is hired and non-owned auto insurance?


Hired and non-owned auto (HNOA) insurance covers liability expenses related to accidents involving vehicles that your restaurant uses for work purposes but doesn’t own. This includes vehicles that your business rents, as well as your employees’ personal vehicles that are used for deliveries.


Under HNOA insurance, the business is the named insured. This coverage is typically added to your business automobile policy; however, it can be added to your business owner’s policy or other restaurant insurance packages. An HNOA policy typically covers liability claims and defense costs. It can cover attorney fees, settlements or judgments, and other court costs if a restaurant is sued as a result of the accident. What’s more, these policies can cover the actions of both full-time and part-time employees.

Typically, an employee’s personal automobile insurance will provide primary insurance for accidents if the employee is using their own vehicle for a delivery. The personal auto insurance policy will cover damage to the employee-owned vehicle, but it will not protect the business if the claimant sues. This is where the HNOA policy comes into play.


Preventing Accidents


In order to prevent accidents and prevent insurance claims, it is recommended that restaurants take the following steps, some of which might be required by your insurance company:

  • Collect motor vehicle records (MVRs) for all potential drivers. Drivers with serious violations (e.g. DUI, speeding in excess, reckless driving, or any suspension or revocation) should not be allowed to make deliveries.

  • Pull MVRs on all drivers at the time of hire and on an annual basis thereafter.

  • Comply with all state and local requirements for delivery drivers.

  • Ensure all drivers have a valid driver’s license with a minimum of three years’ licensed driving experience.

  • Obtain a copy of each driver’s current auto insurance declaration page—many personal auto policies have exclusions for delivery. Verify that the employee has coverage for deliveries. If there is no coverage on their personal policy,don’t let them drive for your business.

  • If employees will be using their own vehicles for deliveries, remind them that their personal insurance will pay first.

  • Perform pre-trip safety inspections of delivery vehicles and ensure vehicles are in proper operating condition each day. If a vehicle does not meet inspection requirements, do not allow employees to operate the vehicle for work purposes.

  • Never instruct drivers to rush. While getting food to customers in a timely fashion is important, accidents are far more costly than late deliveries.

  • Require delivery drivers to sign policies on safe driving and distracted driving.

  • Hold regular safety classes for drivers.

Count on the Experts


Because each restaurant faces a unique set of risks, it is important to team up with an experienced insurance agent who understands your business and can knowledgeably review your situation to design coverage tailored to your exact needs.


Contact E.B. Cohen Insurance and Risk Management today to learn how we can help you protect your business.

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