According to the National Restaurant Association, nearly 40% of Americans have food delivered to them every week. During the pandemic, many restaurants had to quickly pivot to offering curbside and/or delivery in order to stay afloat, and the popularity has only gone up for consumers since then.
As a result, food delivery has become a standard part of doing business for many restaurants, cafés, delis, bakeries, and even bars offering takeout. Whether you employ your own delivery drivers or rely on third-party services like DoorDash, Uber Eats, or Grubhub, it's important to understand how your Commercial Insurance responds if something goes wrong.
Many business owners assume their existing policies automatically cover delivery-related accidents and liability, but that isn't always the case. In today’s Aegis blog post, we explore where your Business Insurance coverage begins and where it may fall short, in order to help protect your business from costly surprises.
The first pertinent question to consider is who is actually delivering the food. The answer makes a significant difference in how insurance coverage applies.
If you employ your own drivers using company-owned vehicles, you'll likely need a Commercial Auto policy to cover accidents involving those vehicles. General Liability Insurance does not cover automobile accidents, so relying solely on a Business Owners Policy (BOP) or General Liability policy could leave a major coverage gap.
If employees use their personal vehicles to make deliveries, the situation becomes more complicated. While the employee's personal auto insurance may provide some coverage, many personal policies exclude accidents that occur while the vehicle is being used for business purposes.
Without the proper endorsements or additional business coverage, both the employee and your business could face unexpected liability.
Many restaurant owners believe using third-party delivery platforms eliminates their insurance concerns. While companies like DoorDash and Uber Eats typically carry insurance for their own drivers, those policies generally apply only under certain circumstances and often protect the delivery company more than your business.
Your restaurant could still be drawn into a lawsuit if:
Even if your business is ultimately found not liable, defending against a lawsuit can still result in significant legal expenses for your business if you’re not properly protected.
One of the most overlooked types of coverage for restaurants is Hired and Non-Owned Auto Liability (HNOA). This endorsement is designed to help protect businesses when employees use their own vehicles for work-related tasks, including food deliveries.
While HNOA doesn't pay to repair the employee's vehicle, it may help protect your business if it's named in a lawsuit following an accident involving an employee driving for business purposes.
Many restaurants can add this valuable protection for a relatively modest cost compared to the huge financial impact of an uncovered claim.
As your business grows, your insurance needs often change. Restaurants that added delivery services during and after the pandemic may not have updated their Commercial Insurance policies to reflect those new operations. An annual policy review with Aegis Insurance & Financial Services can help identify coverage gaps before they become expensive problems.
Questions worth discussing with an Aegis agent include:
The answers can make a significant difference if an accident occurs.
Running a successful restaurant means balancing customer service, employee safety, and business risk every day. Making sure your insurance keeps pace with the way you operate is one of the smartest investments you can make.
Contact Aegis Insurance & Financial Services at 713-850-7622 for more information or to schedule a consultation with our Commercial Insurance agents.
Call Us TODAY!
713-850-7622