Case study: Restaurant Insurance Coverage in the time of Covid-19 - Erwin Insurance Agency® Skip to main content
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Case study: Restaurant Insurance Coverage in the time of Covid-19

By August 14, 2020August 17th, 2020No Comments
Food delivery person with mask and gloves. Many restaurants switched to delivery services during Covid-19 shutdowns, causing insurance worries.

Covid-19 has presented challenges for many businesses. Among the most affected, the hospitality industry essentially came to a halt overnight. Restaurants of all types had to make quick, significant changes to their operations if they had any chance of generating enough revenue to support fixed expenses and to keep key personnel on the payroll. One of the most common changes for restaurants was to shift to 100% delivery. For many, this was an entirely new activity.

What many of these restaurants didn’t realize (and, frankly, they had a lot on their mind!), is that, from a risk and insurance perspective, delivery activities present new exposures. And if they didn’t typically deliver food in the normal course of business, chances were high that the new activities would not be covered by their existing insurance program.

The coverage most needed is a type called “Hired and Non-owned Auto” coverage, or HNOA coverage for short. It’s a tricky coverage. It extends the restaurant’s liability protection to vehicles being used in their business which the restaurant does not own (think employees using their own vehicles to deliver). Many insurers do not offer this coverage given the activity’s unique and high-risk exposures.

Erwin Insurance Agency set out to find a standalone HNOA solution to help restaurants solve this problem quickly without having to change much about their existing program. Through Erwin’s industry relationships, we were able to come up with six options for this coverage within the first two weeks of shutdown orders going into effect, including some that were designed specifically for Covid-19 (shorter-term policies, forgiveness of absence of delivery risk management standards, etc). In addition, we were able to produce an easy online application for policies to be quoted and issued on the spot.

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