Coverage Corner

DOES A PERSONAL AUTO POLICY COVER FOOD DELIVERY?

By Bill Wilson

Here is the short answer to the question posed by this article: Maybe. Using the ISO Personal Auto Policy as an industry standard model form, while being aware that there are many variations of this language in the marketplace, here is the liability exclusion applicable to most delivery scenarios:

We do not provide Liability Coverage for any “insured”...

For that “insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This includes but is not limited to any period of time a vehicle is being used by any “insured” who is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the vehicle.

This exclusion (A.5.) does not apply to:

a. A share-the-expense car pool; or

b. The ownership or operation of a vehicle while it is being used for volunteer or charitable purposes.

“Transportation network platform” means an online-enabled application or digital network used to connect passengers with drivers using vehicles for the purpose of providing prearranged transportation services for compensation.

This exclusion also applies to all other coverages in the ISO policy, not just liability. Again, be aware that non-ISO forms may treat delivery exposures differently, many of them specifically excluding delivery of certain products such as food.

Note that the exclusion, with a couple of specific exceptions, applies to the ownership or operation of a vehicle while it is being used as a “public or livery” conveyance to transport people or property. Over the years, courts have generally found that “public or livery” refers to, for example, “a vehicle held indiscriminately for hire to the general public,” but not for using the vehicle to transport persons or property for a private entity.

Reviewing case law from around the country going back over 40 years, a number of courts have opined that delivering pizzas for firms like Domino’s, Pizza Hut, Papa John’s, etc. did not constitute holding the vehicle out to the general public for hire.

On the other hand, individuals delivering food for multiple entities using apps for services such as Uber Eats, DoorDash, and GrubHub might find that a claim arising while using one of these apps is denied by their personal auto insurer.

If this happens, one issue is whether the “transportation network platform” language applies to food delivery, given that the policy definition of this term refers to “passengers” and not property delivery per se. However, even if this language is deemed by a court not to apply, the insurer might still consider this to be a “livery” exposure since the insured is delivering food for multiple entities rather than a single entity.

Given that “maybe” is not a productive answer to a policy coverage question, agencies might be advised to consult with the claims departments of the personal auto carriers they represent and document how they believe these various exposures should be insured.

Bill Wilson, CPCU, ARM, AIM, AAM is the founder and CEO of InsuranceCommentary.com and the author of six books, including “When Words Collide…Resolving Insurance Coverage and Claims Disputes,” the highest rated insurance book on Amazon and, according to BookAuthority, the #1 insurance book of all time. He can be reached at Bill@InsuranceCommentary.com.