Commercial Auto Insurance

A server takes a catering tray across town in her own hatchback. A cook drops a late order on his way home, in a car you have never seen, inspected or thought about. Neither vehicle appears anywhere in your records, and either one can produce the largest claim your business will ever face.

Because if the trip is your errand, the claim comes to you. Nobody injured at that intersection sues a hatchback. They sue the business that sent it, and they do so knowing perfectly well which of the two has insurance.

So the question worth asking first is not how many vehicles you own. It is which vehicles get used for your work, and whether your policy has anything to say about them.

The car you do not own, and the claim that finds you anyway

Start here rather than with the van, because this is where operations are actually exposed. Hired and non-owned auto covers the business’s liability arising out of vehicles it neither owns nor registers, when those vehicles are used in its business — the delivery run, the bank drop, the emergency trip to a supplier because the fish did not arrive.

Non-owned: your employee’s vehicle, your errand

Non-owned covers the liability that reaches the business when a person drives their own car on its behalf. The critical property is what it is not: it is not physical damage cover for that car. If your driver wraps their own vehicle around a pole, the repair is theirs, not yours and not the policy’s. What the coverage answers is the claim brought against the business by whoever else was involved.

It is also the coverage most likely to be absent from a restaurant’s programme, for a reason that is almost logical: an operator with no vehicles reasonably concludes there is no auto exposure, and a policy assembled around that conclusion has nothing in it about cars. Then delivery starts, or one member of staff begins running orders on quiet nights, and the exposure arrives without a purchase order or a conversation.

Hired: the van you rent for a weekend

Hired auto covers vehicles you rent, lease or borrow rather than own — the box van for a festival, the refrigerated truck for a wedding, the pickup a friend lends you for a market run. There are two questions here rather than one. Liability while the vehicle is in your use is the first. Damage to the rented vehicle itself is the second, and it is the one that gets skipped, because the rental counter will look to you for it.

How the policy decides which vehicles it is talking about

A commercial auto policy does not describe your errands. It describes categories of vehicle, and attaches each coverage on the policy to one or more of them: vehicles you own, vehicles you hire, vehicles you do not own, vehicles you acquire during the policy period, and a catch-all for any vehicle at all for which liability cover is required.

Carriers abbreviate those categories on the declarations page, compactly enough that an operator reading their own policy can miss what it says. Ask for the words behind the shorthand: which categories does the liability coverage attach to, and which does the physical damage coverage attach to? Those are frequently different answers on the same policy, and both can be correct.

The practical test is simple. A policy whose liability coverage attaches only to vehicles the business owns has nothing whatever to say about the hatchback in the intro. If your policy names only the van, the van is what you have insured and the rest of the operation is uninsured on the road. That is usually a one-line change, and discovering you needed it afterwards is the expensive way to learn it.

The same mechanism decides what happens when you buy a vehicle mid-term. Under some designations a newly acquired vehicle picks up coverage automatically; under others it does not until you report it. Ask which yours is, and if you must report, put the call on the same list as the plates.

Who is an insured while driving

This part reads counter-intuitively, and it decides who is standing alone after a crash. The business, as the named insured, is an insured. So, generally, is a person driving a vehicle the business owns with permission — the manager taking the van to the cash and carry is protected while doing it. But an employee driving their own car on your errand is commonly not an insured under your policy at all. The non-owned coverage is written to protect the business against claims arising out of that use; it is not written to protect the driver personally.

Follow that through and the consequence is uncomfortable. Your driver’s protection is their own policy, and their own policy is the one most likely to take issue with paid delivery. Some carriers will extend the definition of an insured to employees using their own vehicles on the business’s behalf, and if you have people delivering regularly it is worth asking whether yours does. It is a fair thing to do for people driving for you, and it removes an argument that would otherwise be conducted around your business.

The personal policy problem

A personal auto policy is written for personal driving. Most of them restrict or exclude carrying property or passengers for a fee, and a paid delivery is a reasonably plain example of carrying property for a fee. Wordings vary, some insurers now sell an endorsement for exactly this, and the only way to know which situation a given driver is in is to read the policy they hold.

What matters here is not a legal conclusion. It is that the first policy everyone assumes will respond is the one most likely to decline, and when it declines the claim does not evaporate. It travels up to the business that sent the driver.

Two things help. Ask your drivers what their own policies say about delivery, and treat a blank look as an answer. And write down what your business permits: who may deliver, in what, holding what licence, and what is not allowed on a run at all. A written rule is worth having for its own sake, and it is also the document that shows an underwriter you have thought about the question.

The vehicle, and what rides in the back of it

Where you do own vehicles, the policy has a second half that has nothing to do with liability. Collision answers for the van after an impact. The other-than-collision cover answers for the rest of what happens to a vehicle parked behind a restaurant overnight: the break-in, the fire, the hail, the theft of the vehicle itself.

What that half does not answer for is the load. Auto physical damage coverage is written about the vehicle, and the catering order destroyed inside it when the van was hit is a property question rather than an auto one. For a routine delivery the distinction rarely matters. For a full event set-out — the trays, the chafers, the rented glassware, the hours of prep sitting in the back — it matters a great deal, and it is worth raising before the event rather than afterwards.

The same is true of what you have added to the vehicle. Warming cabinets, shelving, a refrigeration unit, a signed wrap: these are part of what a replacement would cost you, and they get left out of a value set from a used-vehicle listing. Say what is fitted.

Who drives, and on what terms

On most lines the operator’s influence over the risk is indirect. Here it is direct, immediate and almost entirely about hiring and habits.

Pull a motor vehicle record before anybody drives on your behalf, and re-pull it on a schedule, because a licence status changes without anyone sending you a notice. Keep a list of who is authorised to drive, and keep it current as the crew turns over. Decide what your rule is about phones on a run, about passengers, about personal errands mid-route, and put it in writing where new staff will see it.

For vehicles you own, keep the maintenance record. It is the cheapest answer to an allegation that the van was not fit to be on the road, and it is nearly impossible to reconstruct after the fact.

Underwriters look at this material closely on an account with a short loss history, because it is the only evidence available of how the operation is run. Who drives, how long they have held a licence, what their records show, and whether anybody in the building is checking — an operator with answers is describing a system, and it reads very differently from an operator who will have to go and find out.

Where commercial auto ends and another policy begins

A single crash on a delivery run touches several policies, each answering a different question. Your own driver’s injuries are workers compensation, because they were hurt in the course of their work, and that is true whoever owned the car and whoever caused the collision. The other party’s injuries and their vehicle are the auto liability question. A guest hurt inside your dining room is general liability and has nothing to do with this line at all. And if the claim runs past the auto limits, an umbrella policy sits above — but only where it is written to sit over auto, which is a thing to confirm rather than assume.

One boundary is specific to this trade and worth naming. Whether alcohol may be delivered at all, by whom, and under what conditions is a question of state law and of your licence, and it changes. Adding it to a delivery menu is a decision to check first, because it moves the exposure into a different policy as well as a different rulebook.

Why Wexford Restaurant Insurance

We are an independent agency, and we build this line for this trade rather than adapting something written for a fleet. That shows up as questions other people do not ask — about catering weekends, about who runs the bank drop, about the member of staff who delivers on Fridays in her own car.

The value here is in reading the declarations page rather than the headline limit: which vehicle categories the liability coverage actually attaches to, whether the drivers are insureds, whether the umbrella sits over auto. It takes a few minutes and it is the difference between a policy that answers and a policy that names a van.

Tell us how food actually leaves your building. A licensed agent will read the answer and call you back.