Why South Carolina Restaurants Need Business Auto Insurance (BAP or HNOA Coverage)

By Brad Davis, CIC (January 23, 2026)
Davis Insurance Associates – Myrtle Beach, South Carolina

Running a restaurant in South Carolina means juggling a lot – staffing, food costs, customer satisfaction, and maybe even deliveries or catering. But one area many restaurant owners overlook is auto insurance for business use.

If your restaurant owns a vehicle, rents one, or even if your employees occasionally use their personal cars for work, you may have a significant exposure that a standard Commercial General Liability (CGL) or Business Owners Policy (BOP) won’t cover properly. That’s where a Business Auto Policy (BAP), or at least Hired and Non-Owned Auto (HNOA) coverage, comes in.

Let’s break down why this protection matters for South Carolina restaurants and what you should know before hitting the road.

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Why Restaurants Have Auto Exposures (Even If You Don’t Own a Vehicle)

Many restaurant owners assume they don’t need business auto insurance because they don’t have a company vehicle. However, auto exposures exist even when you never purchased a car in your business name.

Here are a few common examples:

• Deliveries: If your restaurant offers delivery, whether using your own car or an employee’s, you have business auto exposure.

• Catering and events: Driving food or equipment to a catering venue or festival counts as business use.

• Bank runs or supply pickups: If a manager or employee drives their personal car to deposit money or pick up supplies, your restaurant can be pulled into an accident-related lawsuit.

• Vehicle rentals: Renting a van for a large event or seasonal delivery schedule creates additional risks, too.

Without a proper Business Auto Policy or HNOA coverage, these common situations could lead to uncovered claims.

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The Limitations of a CGL or BOP Endorsement

While some Business Owners Policies (BOPs) or General Liability (CGL) policies allow you to add “non-owned and hired auto” coverage by endorsement, that approach has two major limitations:

1. Aggregate limits apply.
   When you attach auto coverage to a CGL or BOP, it typically becomes part of the policy’s annual aggregate limit. This means multiple claims could quickly exhaust your available coverage – leaving your business exposed if another accident occurs later in the year.

2. Coverage flexibility is limited.
   A stand-alone Business Auto Policy allows you to customize coverages such as:

   • Hired Auto Physical Damage (for rented or borrowed vehicles)

   • Drive Other Car coverage (for certain individuals like owners or executives)

   • Employee Hired Auto endorsements

   • Broader Insured provisions

These options aren’t always available through most endorsements to a CGL or BOP.

You can read more from this III (Insurance Information Institute) article – Business Vehicle Insurance.

In short, a separate Business Auto Policy offers better protection, higher limits, and more flexibility.

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Understanding BAP and HNOA Coverage

A Business Auto Policy (BAP) is the standard ISO form designed to cover:

• Owned Autos: Vehicles registered in your business name.

• Hired Autos: Vehicles you rent or borrow for business use.

• Non-Owned Autos: Vehicles owned by your employees but used for your business (for deliveries, errands, etc.).

If your restaurant owns or leases vehicles, a full Business Auto Policy is the way to go.

If your restaurant does not own any vehicles, you should at least consider Hired and Non-Owned Auto (HNOA) coverage. This can be written as a stand-alone policy or added by endorsement to some BOPs, though a stand-alone version typically provides broader and more reliable protection.

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Why HNOA Coverage Is So Important

Imagine this:
An employee takes their own car to drop off a catering order and causes an accident that injures another driver. The injured party sues not only the employee but also your restaurant.

If your business doesn’t have HNOA coverage, you could be responsible for paying attorney fees, settlements, and judgments out of pocket.

Even though the employee’s personal auto insurance can be primary, it often isn’t enough to cover large claims. And without a BAP or HNOA policy, your business could be next in line financially.

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Tailoring Coverage for Your Restaurant’s Needs

Restaurants in South Carolina vary widely, from food trucks and fine dining to coffee shops and catering companies, and their auto insurance needs vary too.

Here are a few key coverage options to discuss with your insurance agent:

• Hired Auto Physical Damage Coverage: Covers damage to vehicles you rent or borrow, not just liability.

• Employee Hired Autos: Extends coverage to employees who rent vehicles in their own name for business use.

• Drive Other Car Coverage: Useful for business owners who may not have a personal auto policy.

• Symbol 1 or Symbol 9 Designations: These define which autos are covered and should be carefully selected for your situation.

*The goal is to ensure that every vehicle used in your business, whether owned, hired, or borrowed, is properly insured. While it may not be feasible to insure every possible scenario, business owners should also focus on sound risk management practices to help reduce the risk of financial loss.

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Real-World Example

A Myrtle Beach restaurant owner rented a van to transport equipment to a local food festival. The van was involved in an accident that injured a pedestrian.

Because the owner had Hired and Non-Owned Auto coverage under a stand-alone Business Auto Policy, the claim was fully covered under that policy’s liability limit.

Had the owner relied solely on their BOP’s endorsement, the claim could have been limited, or even denied, depending on how the endorsement was written and what limits remained under the policy’s aggregate.

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Don’t Overlook This Coverage

Even if your restaurant doesn’t have a fleet or delivery service, you likely still have an auto exposure.
A single accident involving an employee on a quick errand could turn into a major claim against your business.

That’s why most insurance professionals, including those who specialize in restaurant risks, recommend at least securing Hired and Non-Owned Auto coverage for all restaurants in South Carolina.

It’s affordable, customizable, and provides peace of mind knowing your business is protected on and off the road.

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Protect Your Restaurant with the Right Coverage

At Davis Insurance Associates, we help restaurants across South Carolina and the Grand Strand (including Myrtle Beach, Conway, and North Myrtle Beach) find the right protection for their unique needs.

Whether you’re delivering, catering, or just running daily errands, we can help you determine the right combination of Business Auto and Hired and Non-Owned Auto coverage for your business.

👉 Get started today at ThinkDavisInsurance.com or call (843) 213-0000 to speak with a local agent who understands restaurant insurance.

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Disclaimer: This article is intended for general informational purposes only and does not replace the terms, conditions, or coverages outlined in your insurance policy. Always read your full policy carefully to understand your specific coverages and exclusions.