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Delivery in the Time of COVID-19

Restaurants and other retailers switching to delivery need to carefully consider their insurance.

By - Apr 8th, 2020 03:22 pm
Cousins Subs delivers. Photo courtesy of Cousin Subs.

Cousins Subs delivers. Photo courtesy of Cousin Subs.

Social distancing and Wisconsin’s Safer-at-Home requirement in response to COVID-19 are having a direct impact on the food service industry and other retail establishments. To maintain business in these unprecedented times, some restaurants and shops have expanded their delivery capabilities, while others are offering those services for the first time. 

When a restaurant implements these changes to service, it is important to consider any changes that may be needed to insurance policies to ensure the business and employees are not only healthy and safe, but covered in case of accidents. If your business is new to delivery, you may need to consider Hired and Non-Owned Auto Insurance coverage.

What is Hired and Non-Owned Auto insurance?

Hired and Non-Owned Auto insurance (HNOA) covers liability expenses for any accidents involving vehicles a business does not own, but rather uses for work-related purposes. This includes hired vehicles — those that a group rents out for any number of reasons, such as event setup or moving purposes — and non-owned vehicles, which are typically owned by employees and used for purposes like running a work-related errand or providing food delivery. 

Who needs HNOA insurance?

Any business that utilizes rented or non-owned vehicles should consider HNOA coverage — including restaurants and shops providing delivery services. Meant to work in conjunction with other liability policies and employees’ personal auto coverage, HNOA will protect the business in case it is sued as a result of an accident. 

Understanding the immense challenges restaurants and retail organizations are facing, the Wisconsin Office of the Commissioner of Insurance (OCI) has issued an order meant to remove any insurance barriers that may prevent a restaurant or retail business from providing delivery service, thus making it more readily available through a restaurant’s existing insurer. 

What do delivery drivers need to know?

HNOA insurance and personal car insurance work in tandem to provide comprehensive coverage. A personal car insurance policy will cover physical damage to the vehicle, while the HNOA coverage handles the liability aspects if an accident results in litigation. However, a typical personal auto policy will not apply to vehicles used for commercial purposes, including food delivery, so having HNOA coverage through an employer is integral to staying covered while working. 

Recognizing this could be a troublesome barrier for restaurants, shops and individuals looking to pivot to a delivery model during the Safer-at-Home order, the OCI order states that insurers cannot deny a claim under a personal auto policy because the incident occurred during a work-related food delivery – in other words, temporary food delivery drivers can breathe easy, so long as they have personal car insurance.

How are established food delivery services impacted?

Because the OCI order is in place specifically to help restaurants, the change in protocol does not apply to delivery drivers who work for delivery services not affiliated with a specific restaurant, such as GrubHub or Postmates. The insurance requirements and policies provided by the employer can vary greatly, and both new drivers and long-time contractors alike should check their employers’ insurance policies, as well as their personal policies, and understand the extent of coverage. 

Visit thesilverlining.com to learn more about auto insurance or to be connected with an agent.

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