Food delivery moves part of a restaurant’s operation onto public roads.
An employee may use a personal car to deliver an order. A manager may pick up supplies. The restaurant may rent a van for a catering event or borrow a vehicle when its regular delivery car is unavailable.
If an accident happens during one of those trips, the restaurant may be named in a claim even though it does not own the vehicle. Hired and non-owned auto insurance is designed for that business liability exposure.
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Quick Answer: What Is Hired and Non-Owned Auto Insurance?
Hired and non-owned auto insurance, often shortened to HNOA, provides liability protection when a business uses vehicles it does not own.
Hired auto coverage generally applies to certain vehicles the restaurant rents, leases, hires, or borrows for business use. Non-owned auto coverage generally applies when employees use their personal vehicles for restaurant business, such as delivering food or picking up supplies.
HNOA is usually liability coverage. It may help protect the restaurant against covered claims for injuries or property damage caused to other people. It generally does not pay to repair an employee’s personal vehicle.
Hired Auto vs. Non-Owned Auto Coverage
Although the two coverages are often packaged together, they apply to different situations.
Coverage | Vehicle involved | Restaurant example |
|---|---|---|
Hired auto | A vehicle rented, hired, leased, or borrowed by the business, subject to policy definitions | The restaurant rents a van for a catering event |
Non-owned auto | A vehicle the business does not own, lease, or hire, often an employee’s personal car | A server uses a personal car to deliver an order |
Commercial auto | A vehicle owned or titled to the restaurant | The restaurant owns a car used for daily deliveries |
The exact definitions matter. Some policies do not treat a vehicle borrowed from an employee, owner, partner, or household member as a hired auto. It may fall under non-owned auto coverage or require a different insurance solution.
Why Restaurants Face This Risk
Restaurant owners sometimes think they do not need auto insurance because the business does not own a vehicle. Ownership, however, is only part of the question.
A restaurant may still face auto liability exposure when an employee delivers takeout orders, visits a grocery store for missing ingredients, picks up beverages or packaging, takes a deposit to the bank, travels between locations, or transports food and equipment to a catering venue.
Suppose a manager is driving to pick up supplies and rear-ends another vehicle. The injured party may pursue the driver, but the restaurant could also be named because the trip was made for business.
Even a short errand can become a serious claim when medical expenses, vehicle repairs, lost income, and legal costs are involved.
What HNOA Insurance May Cover
Hired and non-owned auto insurance may help with the restaurant’s liability for a covered accident involving a qualifying vehicle used for business.
Third-Party Bodily Injury
If another driver, passenger, cyclist, or pedestrian is injured, the restaurant may face a claim for medical expenses, lost wages, pain and suffering, or other damages.
Third-Party Property Damage
Coverage may respond when the driver damages another vehicle, fence, storefront, building, sign, or other property.
Legal Defense
The restaurant may need legal representation even when it believes the employee did not cause the accident or the claim appears exaggerated. HNOA insurance may help pay covered defense expenses according to the policy.
Settlements or Judgments
If the restaurant is found legally responsible, the policy may help pay a covered settlement or judgment up to the available limit.
Whether coverage applies depends on who was driving, why the vehicle was being used, how it was obtained, and the wording of the policy and endorsements.
What HNOA Usually Does Not Cover
HNOA should not be mistaken for complete protection for every person, vehicle, or loss connected to a delivery.
It generally does not cover physical damage to an employee’s personal car, collision damage to a vehicle owned by the restaurant, normal wear or mechanical breakdown, or food damaged during transportation. It may also exclude personal errands, undisclosed drivers, excluded vehicle types, and delivery activities that fall outside the operations described in the policy.
The employee driver’s own injuries may need to be addressed through workers’ compensation, medical payments, personal auto insurance, or another applicable coverage.
Damage to a rented vehicle is another potential gap. The restaurant may need hired auto physical damage coverage, a rental company loss damage waiver, or a separate arrangement. Hired auto liability alone does not automatically pay for damage to the rented vehicle itself.
Does an Employee’s Personal Auto Policy Apply?
It may, but a restaurant should not build its delivery program around that assumption.
A personal auto policy belongs to the employee, not the restaurant. Its liability limits may be too low for a serious accident, and its terms may restrict or exclude certain business or delivery activities.
If the personal insurer responds to the accident, the restaurant may still face a separate claim. Non-owned auto coverage is designed to help protect the business’s liability interest, subject to the policy terms.
Before allowing personal vehicles to be used for deliveries, the restaurant should ask employees to confirm that their insurers know how the vehicles are being used. An insurance card proves that a policy exists. It does not prove that restaurant delivery is covered.
HNOA vs. Commercial Auto Insurance
The appropriate coverage depends largely on who owns the vehicle.
Situation | Coverage commonly considered |
|---|---|
Restaurant owns the delivery vehicle | Commercial auto insurance |
Employee uses a personal vehicle for deliveries | Non-owned auto liability |
Restaurant rents a vehicle for catering | Hired auto liability and possible hired auto physical damage |
Restaurant uses owned and personal vehicles | Commercial auto with appropriate owned, hired, and non-owned auto coverage |
Independent delivery company handles orders | Vendor insurance and contract review |
If the restaurant buys, titles, or regularly leases a vehicle, HNOA is not a substitute for commercial auto insurance covering that vehicle.
Third-Party Delivery Services
Using a delivery platform or independent courier may reduce the number of employees driving, but it does not eliminate every risk.
The restaurant should understand who employs or contracts with the driver, whose insurance is intended to respond, and when any platform-provided coverage begins and ends. The agreement may also contain indemnification requirements or limitations that affect how responsibility is divided after an accident.
Restaurants should request appropriate insurance information from delivery vendors and review the contract alongside their own coverage. A contract may assign responsibility between the parties, but it does not stop an injured person from naming multiple businesses in a claim.
How Restaurants Can Reduce Delivery Risk
Insurance is only one part of a safer delivery program. Clear driving rules can reduce avoidable accidents and make claims easier to investigate.
Review Drivers Before Assigning Deliveries
The restaurant should check motor vehicle records, confirm that each driver has a valid license, and verify current personal auto insurance. Driving records and insurance documents should be reviewed periodically, not only on the employee’s first day.
Set Basic Vehicle Standards
Personal vehicles used for delivery should have valid registration, working lights, safe tires, functioning brakes, and reasonable maintenance. Employees should report any condition that makes a vehicle unsafe to operate.
Create a Clear Phone Policy
Drivers should not text, enter addresses, confirm orders, or use delivery apps while the vehicle is moving. Routes and instructions should be reviewed before leaving or after parking safely.
Use Realistic Delivery Times
Overly aggressive delivery promises can encourage speeding, unsafe parking, and rushed decisions. Delivery estimates should account for traffic, weather, distance, and restaurant preparation time.
Document Who Is Allowed to Drive
Only approved employees should make deliveries or run business errands. A busy shift should not become a reason to hand an order to an employee whose driving record and insurance have never been reviewed.
Prepare an Accident Procedure
Drivers should know whom to call, what information to collect, and how to document the scene. Accidents should be reported promptly, even when the damage appears minor.
Questions to Ask Before Renewal
Before renewing its insurance, a restaurant should confirm whether any employees use personal vehicles for deliveries or errands and whether the policy includes both hired and non-owned auto liability.
The review should also address the applicable liability limit, coverage for owners and managers, hired auto physical damage for rentals, excluded drivers or vehicle types, and whether restaurant delivery is included in the operations reported to the insurer.
If the restaurant carries commercial umbrella insurance, it should confirm whether the umbrella sits above the HNOA coverage. Management should also ask what driver records must be maintained and whether employees should carry minimum personal auto liability limits.
These answers should reflect how the restaurant operates today, not how it operated when the original application was completed.
Protect Your Restaurant’s Delivery Exposure
Delivery can help a restaurant reach more customers, but it also creates a liability exposure beyond the dining room.
If employees use personal vehicles, the restaurant rents vans for events, or managers regularly run business errands, hired and non-owned auto coverage deserves a place in the insurance review.
At StarNet Insurance Group, we help restaurant owners compare their actual delivery practices with their current insurance program. Contact us to review your restaurant insurance, commercial auto, hired and non-owned auto liability, and umbrella options before the next delivery becomes a claim.
Internal Resources
Restaurant Liquor Liability: What Owners Should Know
Restaurant Insurance: Kitchen Fire Risk and Coverage
Food Spoilage Coverage for Restaurants
Common Insurance Gaps and the Add-Ons That Fix Them
External Resources
Travelers: Hired and Non-Owned Auto Coverage
Progressive Commercial: What Is Hired and Non-Owned Auto Insurance?
