Employee Driving: The Auto Risk Restaurants Miss

You do not need a company vehicle to have business auto exposures.

The exposure often comes from employees or managers using personal cars for catering deliveries, supply runs, bank deposits, customer deliveries, event drop-offs, or last-minute errands.

If someone causes an accident while driving for your restaurant, your business can be brought into the claim because the trip was connected to your operations.

Personal Auto Insurance Does Not Protect Your Restaurant

An employee's personal auto policy protects the employee, not your restaurant.

If the employee causes an accident while driving for work, your restaurant can face a claim. The employee's policy may restrict or exclude business use, especially delivery, which means there may be limited coverage or no coverage for the accident.

The Coverage to Review: Hired and Non-Owned Auto

Hired and non-owned auto coverage applies to vehicles your business uses but does not own.

Hired auto applies to vehicles your business rents, leases, or borrows. Non-owned auto applies to vehicles your business does not own but uses for business purposes, such as an employee's personal vehicle.

Note: This is liability coverage for your business. It does not repair the employee's car.

Delivery Creates Business Auto Exposure

Delivery makes driving part of your service model.

The exposure is not limited to full-time delivery drivers. One employee using a personal vehicle for one customer order can create a business auto issue if an accident happens during the trip.

Third-party delivery services can reduce the need for employee delivery, but they bring their own risks. If your restaurant uses outside delivery platforms, be sure to review the hidden risk of third-party delivery services.

Catering Adds Driving Exposure

Catering can put employees on the road with food, equipment, supplies, and return-trip responsibilities after the event. If your staff use personal vehicles or rented vehicles for catering work, it needs to be included in your auto exposure review.

For restaurants expanding into catering, the review should also include off-premises operations, equipment, setup, and employee duties.

Quick Errands Are Business Trips

A common example is the employee who is asked to pick up supplies during a shift. The trip is quick, the vehicle is personal, and no one thinks of it as delivery.

After an accident, the reason for the trip becomes part of the claim.

The same issue can apply when an employee makes a bank deposit, moves product between locations, picks up ingredients, buys supplies, or drops something off for a customer. If the trip was for the restaurant, it should be treated as a business driving exposure.

Define Who Can Drive for the Restaurant

Employee driving should not be handled casually.

Your restaurant should know who is allowed to drive for business, when driving is authorized, and what procedures apply after an accident.

Basic controls may include:

• Valid driver's license verification
• Proof of personal auto insurance
• Motor vehicle record checks when appropriate
• Inspection of vehicles to verify mechanically sound
• Written rules for phone use while driving
• Limits on who may deliver food or run errands
• Accident reporting procedures
• Documentation of approved drivers

Review Auto Exposure Before the Next Trip

If owners, managers, or employees drive for restaurant business, review hired and non-owned auto liability. That includes delivery, catering, errands, supply runs, deposits, and inter-location transfers.

If employees drive for restaurant business, even occasionally, review the exposure before an accident forces the issue.