Business Auto Insurance (also called Commercial Auto Insurance) is important for all types of restaurants. Whether the owners have vehicles registered to the business or you’re employing delivery drivers that drive their own vehicles, Auto Liability risks can be significant significant and should be carefully addressed.

Owned Vehicles

If your restaurant owns vehicles which are registered to the business, you’ll need to purchase a Business Auto policy to properly cover the vehicles and protect your business from the Liability of an At-Fault Accident. The primary coverages to consider when purchasing Business Auto insurance for Owned vehicles are:

 

  Liability:

This is the most important coverage and protects you if a vehicle you own is the cause of an accident. Liability coverage defends your business and pays any damages you may owe to others.

 

   Uninsured/Underinsured Motorist (UM):

UM coverage pays for Bodily Injury to passengers of your vehicle. If a third party is at fault in an accident and they don’t have enough coverage (or don’t have any) to pay for your injuries, UM coverage can help make up the difference. UM coverage does not pay for damage to your vehicle.

 

  Comprehensive:

Comprehensive coverage covers your vehicles for physical damage that was not caused by a collision. This damage may have been caused by weather, vandalism or even theft. This coverage is commonly subject to a deductible.

 

  Collision:

Collision coverage pays to repair damage to your vehicle caused by a collision. This coverage is commonly subject to a deductible.

 

  Other Coverage:

Other available coverages on Business Auto policy include: Towing, Rental Reimbursement, Drive Other Car Endorsements, and Medical Payments. In addition to these coverages, most insurance companies offer additional coverage enhancements that may be beneficial.

 

Non-Owned Autos/ Delivery Drivers

Non-Owned Auto Liability coverage protects your restaurant when it is brought into a lawsuit stemming from an accident caused by an employee driving their personal vehicle for work purposes. This may be someone running to the bank or another errand or a delivery driver. This employee’s auto policy likely would not defend your business if named in the lawsuit. It would only defend the owner/driver of that vehicle. 

If your restaurant offers delivery service and your employees are driving their personal vehicles to perform the deliveries. You NEED Non-Owned Auto Liability. This is a significant risk facing your business and failure to properly address it could be catastrophic.

 

Delivery Apps

Restaurants often ask what their exposure is with regard to delivery performed by apps like Doordash and GrubHub. Generally speaking, these drivers do not present significant risk the restaurant. These companies and their drivers are hired by the customer and not by the restaurant. The major app companies have insurance and risk management in place to handle claims stemming form their operations. That’s not to say that your restaurant may not be included in a significant lawsuit involving these drivers but it’s unlikely that you would have liability in this situation. We always recommend discussing these issues with your attorney who is familiar with the laws in your area. 

 

If you’d like a comprehensive review of your restaurants auto liability and help determining which type of Business Auto policy is right for you, please reach out. At Statement Insurance Agency, we specialize in restaurants and understand the risks.