Does a restaurant need hired and non-owned auto?
If employees ever drive for the business in their own cars, or the business rents vehicles, usually yes. A personal auto policy almost always excludes delivering goods for pay, so when an employee's car hits someone on a delivery, the claim comes to the restaurant. Hired and non-owned auto is the coverage that responds. It typically pays for the other person's injuries and the other car, not the employee's car or the food.
Why the claim comes to the restaurant
An employee driving for the business is working for the business. When that car causes a crash, the injured person's lawyer looks past the driver to the restaurant, because the restaurant sent the driver. A catering drop, a run to the supplier and the bank deposit all count.
Delivery is where the personal policy usually drops out. Most personal auto policies exclude using the car to deliver goods for a fee, so the driver's own insurer declines the claim, and the restaurant's policy is the one left.
Hired is not non-owned
They are two parts that are often sold together and sometimes are not. Hired covers vehicles the business rents or borrows. Non-owned covers vehicles the business does not own, which includes an employee's own car. On a commercial auto policy they show as symbols 8 and 9.
The common mistake is a policy with hired and without non-owned. It looks complete on a summary page, and it does not reach the employee's car at all. It is one of the cheapest lines on a restaurant program, which is why the missing half is worth checking.
What it does not pay for
Hired and non-owned auto pays the other side: the other driver's injuries, the other car, the property the crash damaged. It does not pay to repair the employee's car, and it does not pay for the food in the back seat. If the employee is hurt on the run, that is a workers' comp claim, because the employee was on the clock.
If the business owns the van
A van the business owns goes on a commercial auto policy, and every person who will drive it goes on the policy's driver list, including the manager who takes the keys on a short night. The carrier prices and checks the drivers it is told about, and some policies exclude drivers it was not told about.
If a delivery app does the driving
When a third-party delivery app delivers the order, the driver is the app's contractor, and the app carries auto coverage for that driver during the delivery. The food is still the restaurant's. If an order makes someone sick, that claim comes to the restaurant, and the merchant agreement accepted when the account was opened says who covers what between the two.
The question for the agent
Does our auto policy include hired and non-owned, and does it extend to an employee delivering in a personal car? If the answer is hired only, the fix is usually a quick endorsement. Other lines that tend to go unasked about are in The coverages restaurants forget, and the bar at an off-site event has its own question: Can a restaurant serve alcohol off-site?