The Colorado Division of Insurance issued Emergency Regulation 20-E-03 requiring insurers writing commercial and personal automobile insurance in Colorado to remove restrictions on coverage for restaurant employees who suddenly find themselves delivering food during the COVID-19 emergency. The Regulation is effective March 26, 2020, through the period that Public Health Order (PHO) 20-22 is in effect, which closes restaurants and other places of public accommodation such as bars, cafes, and coffee houses and encourages them to offer delivery service of food and beverage. Because of the anticipated increase in restaurant employees driving their personal automobiles or commercial vehicles provided by their employers to accomplish the delivery, the Regulation expresses the Division’s desire to “ensure restaurant employees are able to continue to work” and have motor vehicle liability insurance available to cover them while serving the public interest of delivering food.
The Regulation applies to all insurers that issue or renew personal automobile coverage and insurers that issue or renew named driver commercial automobile policies. As to personal automobile policies, the Regulation requires that after reasonable investigation to determine that four enumerated conditions are met, the insurer waive or suspend the commercial use exclusion/exception from a personal automobile policy. If the conditions are met, which generally establish that the restaurant employee was using his personal vehicle to deliver food to the restaurant’s customers and was acting within the course and scope of his employment, the insurer may not deny coverage under the employee’s personal auto policy simply because the employee was using the automobile for a commercial purpose if a claim were to arise.
Insurers issuing commercial automobile policies to restaurants limited to specific named drivers must waive any exclusion related to drivers not named on the policy. If a restaurant has an existing commercial automobile policy that “provides coverage to all employees regardless of whether the employee typically delivers food as part of his or her job duties, the commercial policy shall be primary over any personal automobile coverage of the employee.”
The Regulation impacts an insurer’s duty to investigate a claim generally, as well as other coverage and primacy considerations. The full text of the Regulation should be reviewed for a complete understanding of the obligations it establishes for automobile insurers under the current circumstances.