Has your business recently started making deliveries? 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.
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.
The following recommendations can help to prevent accidents, some of which may be required by your insurance company:
- Collect motor vehicle records (MVRs) for all potential drivers and annually for all drivers.
- Ensure state and local compliance for delivery drivers
- Obtain a copy of each driver’s current auto insurance declarations page and remind employees using their own vehicles that their personal insurance will pay first for any claims.
- Perform pre-trip safety inspections of delivery vehicles.
- Implement policies and training on safe driving and distract driving; train employees accordingly and require employee acknowledgment of all policies.
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Disclaimer: This Coverage Insights 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.