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.
In response to COVID-19, the Wisconsin Insurance Commissioner ordered all insurance companies to provide coverage for delivery drivers for restaurants during the Public Health Emergency. The extra coverage, called hired and non-owned automobile coverage, must be provided at no extra cost to the insured.
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.
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:
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 us today to learn how we can help you protect your business.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2020 Zywave, Inc. All rights reserved.