What is Food Delivery Insurance?

Food Delivery Insurance is specialized commercial auto insurance that covers your restaurant’s liability and vehicle damage when employees deliver food to customers using company-owned vehicles or their personal vehicles for business purposes. This coverage includes bodily injury and property damage liability if your delivery driver causes an accident, medical payments for injuries to your driver, collision and comprehensive coverage for damage to the delivery vehicle, uninsured/underinsured motorist coverage, and coverage for the food and equipment in the vehicle at the time of an accident. If employees use their own vehicles for deliveries, you need hired and non-owned auto coverage, which extends your liability protection to those vehicles during business use. Standard personal auto insurance policies specifically exclude coverage for commercial activities like food delivery, so proper commercial coverage is mandatory.

What you need to know

Food Delivery Insurance provides essential protection when your restaurant operates its own delivery service, covering both company-owned vehicles and employee personal vehicles used for business purposes.

What this coverage includes:

• Bodily injury and property damage liability – Covers damages if your delivery driver causes an accident
• Medical payments – Covers injuries to your driver regardless of fault
• Collision and comprehensive coverage – Covers damage to the delivery vehicle from accidents or other causes
• Uninsured/underinsured motorist coverage – Protects when the other driver lacks adequate insurance
• Cargo coverage – Covers food and equipment in the vehicle at the time of accident

Coverage for employee-owned vehicles:

If employees use their own vehicles for deliveries, you need hired and non-owned auto coverage. This extends your liability protection to employee vehicles during business use, protecting your restaurant from liability when an employee driving their personal car for your business causes an accident.

The personal auto insurance gap:

Standard personal auto insurance policies specifically exclude coverage for commercial activities like food delivery. This means if your delivery driver causes an accident while delivering food, their personal policy will deny the claim, leaving your restaurant fully exposed to liability.

Third-party delivery services:

If you use third-party delivery services like DoorDash or Uber Eats, verify that they carry adequate insurance. However, you may still need coverage for your products until they’re picked up by the delivery driver, depending on when liability transfers.

Why it matters for Restaurant Owners

If your restaurant offers delivery service using your own drivers (rather than third-party services like DoorDash or Uber Eats), you face significant liability exposure every time a driver gets in a vehicle. Your delivery drivers are on the road constantly, often during rush hours and in residential neighborhoods where accidents are common.

The scope of your liability:

If your delivery driver causes an accident that injures someone or damages property, your restaurant can be held liable for potentially hundreds of thousands or millions of dollars in damages. This includes medical bills, lost wages, pain and suffering, property damage, and legal defense costs.

The dangerous misconception:

Many restaurant owners mistakenly believe their drivers’ personal auto insurance will cover accidents during deliveries, but personal policies explicitly exclude commercial use, meaning there would be no coverage at all. This leaves you personally liable for the full amount of damages, which could bankrupt your business.

Why this coverage is mandatory:

Food Delivery Insurance is not optional if you have your own delivery drivers—it’s a legal and financial necessity. Operating without it exposes you to catastrophic liability that could destroy your business with a single serious accident. The cost is relatively modest compared to the catastrophic risk you face without it.

The frequency of the risk:

Unlike many insurance coverages that protect against unlikely events, delivery accidents are common. Your drivers make multiple trips daily, often rushing to meet delivery timeframes, navigating unfamiliar streets, and dealing with distracted driving while checking addresses. The probability of an accident is high, making this coverage essential rather than optional.