Delivery Risk for Restaurants: The Hidden Insurance Gaps That Can Lead to Costly Claims
Delivery has become a core revenue driver for restaurants, bars, and hospitality groups. What started as a convenience is now an operational expectation. Customers want speed, flexibility, and options. Operators want incremental sales without adding seats or square footage.
But delivery also introduces a category of risk many restaurant owners underestimate until a claim forces the issue.
Auto accidents. Injuries. Contract disputes. Coverage denials. Multi-party lawsuits involving drivers, platforms, landlords, and the restaurant itself.
At Statement Insurance Agency, we routinely see delivery-related losses become some of the most expensive and disruptive claims restaurants face. Not because delivery is inherently dangerous, but because the insurance and risk structure behind it is often misunderstood.
This article breaks down where delivery risk really lives, why common assumptions fall apart during a claim, and how restaurant operators can pressure-test their coverage before something goes wrong.
Why Delivery Risk Is Different From Traditional Restaurant Risk
Most restaurant owners are well-versed in their core exposures. Slip and falls. Liquor liability. Kitchen fires. Workers compensation injuries. These risks are familiar, visible, and widely discussed.
Delivery risk is different.
It extends the restaurant’s operations beyond the four walls of the property and into public roadways, parking lots, apartment complexes, and private residences. It also introduces third parties and personal assets into the risk equation.
That combination creates three challenges:
Liability often involves multiple policies and insurers
Responsibility is not always clear or intuitive
Small coverage gaps can lead to outsized financial consequences
Delivery losses frequently escalate not because the accident was severe, but because the coverage structure was never aligned with how the business actually operates.
The Most Common Delivery Models Restaurants Use Today
Understanding delivery risk starts with understanding your delivery model. Many restaurants operate more than one model at the same time, which increases complexity.
In-house delivery with employee drivers
Employees use their own vehicles to deliver food on behalf of the restaurant. This is one of the most common and most misunderstood delivery setups.
Owned vehicle delivery
The restaurant owns or leases vehicles used for deliveries, catering, or off-site events.
Third-party delivery platforms
Apps such as DoorDash, Uber Eats, and Grubhub handle the delivery, often with independent contractor drivers.
Hybrid delivery
A combination of in-house delivery and third-party platforms, which is increasingly common for restaurants trying to balance margins and customer demand.
Each model carries different insurance implications. Problems arise when coverage is structured for one model but the restaurant operates another.
The Auto Exposure Most Restaurants Miss
When an employee uses their personal vehicle for deliveries, the restaurant is exposed to auto liability even though it does not own the vehicle.
This is where many owners assume they are protected because the employee has personal auto insurance.
That assumption often fails.
Why personal auto insurance is not enough
Personal auto policies are written to cover personal use. When a vehicle is used for business purposes, especially delivery, coverage can be limited or excluded.
Even when the personal policy responds, it does not protect the restaurant from being named in a lawsuit.
Plaintiffs attorneys routinely pursue the business, not just the driver, because the business has deeper pockets and commercial insurance.
The role of Hired and Non-Owned Auto coverage
Hired and Non-Owned Auto coverage is designed to protect the business when it is held liable for accidents involving vehicles it does not own.
Without it, restaurants may discover too late that:
Their general liability policy excludes auto claims
The employee’s personal policy does not defend the business
Defense costs alone can be significant, even for minor accidents
This is one of the most frequent delivery-related gaps we uncover during restaurant insurance reviews.
Owned Vehicles Create a Different Set of Risks
Restaurants that own delivery or catering vehicles face more obvious auto exposure, but that does not mean it is properly insured.
Common issues include:
Vehicles insured on personal auto policies instead of commercial auto
Liability limits set at minimum levels that do not reflect current verdict trends
Umbrella policies that do not extend over auto liability
Auto claims involving bodily injury can escalate quickly. Medical costs, lost wages, and litigation expenses add up fast. In many markets, six-figure settlements are no longer unusual.
If a restaurant owns vehicles, commercial auto coverage is not optional. It is foundational.
Umbrella Coverage and Why It Matters More for Delivery Than Owners Expect
Umbrella insurance is designed to provide additional limits above underlying policies like general liability and auto.
The problem is not that restaurants lack umbrella coverage. The problem is that many umbrellas do not sit over the exposures operators think they do.
We regularly see umbrellas that:
Exclude auto liability
Sit only over general liability
Require specific underlying limits that are not met
Delivery-related auto claims are one of the fastest ways to pierce primary policy limits. If the umbrella is not aligned correctly, the restaurant may find itself uninsured at the worst possible moment.
Third-Party Delivery Platforms Do Not Eliminate Risk
Many restaurant owners believe third-party delivery platforms remove delivery liability from the equation. In reality, they often shift and complicate it.
What platforms typically do provide
Most major platforms carry some form of auto liability coverage for their drivers while actively engaged in delivery.
What they often do not provide
Coverage for the restaurant’s alleged negligence
Protection for incidents occurring during pickup or handoff
Defense for contractual disputes or indemnification claims
Platform contracts are written to protect the platform first. Restaurants that do not review these agreements may unknowingly accept liability they assumed was covered elsewhere.
When an incident occurs, multiple parties may be named in the lawsuit, including the driver, the platform, and the restaurant.
Insurance becomes less about who caused the accident and more about how contracts and policies interact.
Contractual Risk Is a Hidden Delivery Exposure
Delivery introduces more contracts into the restaurant’s operations. Platform agreements. Vendor agreements. Landlord requirements. Catering contracts.
Each one can affect insurance in ways operators do not expect.
Key contractual issues include:
Indemnification clauses that shift liability to the restaurant
Additional insured requirements that are misunderstood or unmet
Waivers of subrogation that affect claims recovery
Insurance does not override contracts. If a restaurant agrees to assume certain liabilities, coverage may not respond as expected.
This is why delivery risk cannot be managed by insurance alone. Contracts and coverage must be reviewed together.
Drivers, Controls, and the Human Factor
Insurance responds after a loss. Risk management helps prevent losses in the first place.
Restaurants with delivery exposure should have basic controls in place, including:
Verification of driver licenses
Clear policies around distracted driving
Guidelines for weather-related delivery decisions
Incident documentation procedures
These controls do not need to be complex. They do need to exist.
From a claims perspective, documentation and consistency matter. Restaurants that can demonstrate reasonable procedures are in a stronger position when liability is contested.
Workers Compensation and Delivery Staff
If delivery drivers are employees, workers compensation exposure applies.
Auto accidents involving employees often trigger both auto liability and workers compensation claims. Coordination between these policies matters.
Restaurants should confirm:
Delivery duties are contemplated in the workers compensation policy
Classifications accurately reflect delivery exposure
Claims reporting procedures are clear and timely
Misclassification issues can complicate claims and lead to premium audits and disputes.
Property and Business Interruption Considerations
While delivery is primarily an auto and liability issue, it can affect property and business interruption exposures indirectly.
Examples include:
Loss of delivery vehicles impacting revenue
Off-site incidents leading to reputational harm and reduced sales
Claims that disrupt operations during peak periods
Restaurants increasingly rely on delivery as a meaningful portion of revenue. When delivery stops, income can drop quickly.
Understanding how delivery integrates into the broader risk profile is essential.
A Practical Way to Pressure-Test Delivery Risk
Restaurant owners do not need to become insurance experts to manage delivery risk effectively.
A simple pressure test includes:
Identifying all delivery models in use
Confirming how auto liability is addressed for each
Reviewing umbrella alignment
Understanding third-party contract obligations
Ensuring basic driver controls exist
This is the purpose of the Delivery Risk Checklist we provide to restaurant operators. It is designed to surface gaps quickly, not overwhelm owners with technical language.
Why Restaurants Work With Statement Insurance Agency
Statement Insurance Agency specializes in commercial insurance for restaurants, bars, and hospitality groups. We take an education-first approach because informed operators make better decisions and experience fewer surprises.
Our role is not just to place coverage, but to help restaurants understand how their operations translate into risk and how insurance responds when it matters.
Delivery is a perfect example of where that guidance makes a difference.
Final Thoughts
Delivery is not going away. For many restaurants, it is essential to growth and competitiveness.
The goal is not to avoid delivery, but to structure it intentionally.
When coverage, contracts, and operations align, delivery becomes a manageable exposure rather than a liability blind spot.
If you want a practical starting point, request our Delivery Risk Checklist for Restaurants. It is designed to help operators identify issues early and have more productive conversations with their advisors.
At Statement Insurance Agency, we believe proactive risk management is one of the strongest advantages a restaurant can have.