Wisconsin Commissioner: Insurers Must Offer Free Coverage for Restaurant Deliveries

Wisconsin’s insurance commissioner has directed insurers to provide insurance coverage for delivery drivers for restaurants during COVID-19 Public Health Emergency, even if those drivers/restaurants previously did not have coverage for such activities. The extra coverage must be provided at no extra cost to the insured, the commissioner’s office reported.

Wisconsin Commissioner of Insurance Mark Afable issued an order on March 23 outlining the directive aimed at helping restaurants in the state, which have been told to shut their doors to prevent the further spread of the COVID-19 virus. The Department of Health Services’ Emergency Order #5, issued on March 17, directed the closures. Under Order #5, restaurants are allowed to remain open for delivery service, even if they did not previously provide food delivery.

Recognizing that some restaurants may not be properly insured for such delivery service, Afable’s order states insurers must “cover delivery services for restaurants on personal auto insurance policies and must offer coverage for hired drivers and non-owned automobiles as a rider on a restaurant’s general liability insurance if it is requested – both at no extra cost to the policyholders,” according to a statement released by the Office of the Commissioner of Insurance (OCI).

Afable said the department worked with the insurance industry to come up with a way to help the restaurant industry.

The order bars insurers from denying “a claim under a personal auto policy solely because the insured was engaged in delivering food on behalf of a restaurant impacted by the restaurant closure.” The personal auto provision applies to all “claims that arise from an occurrence beginning on March 17, 2020.”

Afable’s order also states that insurers providing commercial general liability coverage to a restaurant “must notify their restaurant insureds that hired and non-owned auto coverage is available if requested.” If the insured requests hired and non-owned auto coverage under their CGL policy, the insurer is required to provide it through a rider on the existing policy or through standalone policy.

For the commercial coverage the request date is the effective date. Insurers offering retroactive coverage may request that the insured certify that they have not incurred any potential claims in the period of retroactive coverage.

The order applies to all policies in effect on or after March 17. It will “remain in effect until the public health emergency order is lifted, in whole or in part, to permit restaurants to resume normal operations,” the order states.

American Family Mutual Insurance, which holds the largest share of the auto insurance market in Wisconsin, by press time had not replied to an email from Insurance Journal asking for commentary about the commissioner’s order.

Anna Bryant, a public affairs specialist at State Farm, also one of the largest auto insurers in Wisconsin in terms of market share, said the company is complying with the OCI’s order.