HNOA

Liability If Delivery Driver Gets Into Accident: The HNOA Solution for Last-Mile Founders

Lori Cartwright
February 18, 2026

TL:DR

Key Takeaways

From same-day delivery to quick take-out options around the clock, the demand for last-mile delivery services has never been so prevalent—and the market has answered. Maersk reported that between 2019 and 2023, there were over a thousand last-mile delivery innovations patented and more than 80 industry startups founded since 2015. Needless to say, these businesses’ cars, trucks, bikes, personal vehicles, and other means of transport have hit the roads in big numbers in recent years.

And, like anything moving on the road, logistics companies operating with vehicles face unique risks, such as dangerous and costly accidents involving delivery drivers which can affect business continuity and the balance sheet. These incidents have long-lasting financial and operational impacts that can cripple high-growth startups clawing their way through a highly competitive industry.

But, while a crash is often unavoidable, a robust risk management strategy can be the wind under a startup’s wings when times get tough, rising to the occasion with response plans and specialized insurance coverage, including access to a personal injury attorney. When it comes to the latter, we must emphasize the word “specialized,” as general insurance won’t do when it comes to the risk-prone nature of vehicles. Let’s look into the nitty-gritty to find out why.

The Liability Crisis: Unmasking the Coverage Gap

The potential for success in the last-mile delivery industry is one that shouldn’t be taken lightly—delving into this industry involves careful consideration of the challenges of incurring delivery driver accidents related to their job duties. For instance, the US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) estimated that 39,345 people died in traffic crashes in 2024. While this is the lowest number of fatalities since 2019, it’s still, unfortunately, a lot of them.

When delivery drivers and cars make it into the operational mix, startups are vicariously liable for their negligence in a delivery driver crash while driving on the clock—even if the delivery driver is an independent contractor (1099 driver). As such, it’s too high a risk that regular insurance doesn’t always cover, especially in cases of negligent hiring where due diligence wasn’t performed.

How Standard Policies Respond to Car Accidents

In the case of personal auto policies, these usually exclude “commercial use” from their protection, allowing them to deny claims when drivers get into an accident while delivering packages for profit. As a result, the delivery driver might take legal action against the delivery company for a personal injury claim to recover lost income, medical costs, and other fees incurred during their accident. And, because it’s safe to say these won’t be one-off incidents, it will be difficult for logistics companies to bear these costs time and again without feeling the negative impact in the long term.

Now, when it comes to general liability coverage for delivery vehicles, companies might end up feeling trapped. Although the standard coverage may include premises-related bodily injury and property damage, it excludes any car accidents that occur on public roads.

Ultimately, when personal auto insurance and general liability exclude protecting the risks of last-mile delivery altogether, the full financial burden of defending lawsuits and paying damages—possibly costing hundreds of thousands of dollars—falls directly on your balance sheet when your company is held responsible for such incidents.

HNOA Defined: The Essential Defense

When building a risk management strategy for your last-mile delivery company, or any logistics company in general, you’ll realize you can’t rely on general liability or the driver’s own insurance. Instead, Hired and Non-Owned Auto (HNOA) will be your go-to for all things mobility in your business.

Simply put, this is a liability coverage specifically designed for vehicles used for business purposes that the company does not own. This includes employee-owned vehicles, rented cars, and, most importantly, 1099 driver vehicles. Its key purpose lies in protecting the company against any possible lawsuits brought by the injured third party if an accident occurs when the delivery driver’s personal insurance refuses to pay.

The HNOA Coverage Pillars for Delivery Companies

What’s the HNOA liability if a delivery driver gets into an accident? Let’s deep dive into its coverage:

Bodily injury: HNOA will cover the medical costs and loss of income for the third party injured in the accident involving your vehicle and the hired delivery driver.
Property damage: It covers the cost to repair or replace the third party’s vehicle or property damaged.
Legal defense costs: Most importantly, HNOA pays for the attorneys and court fees to defend your company, which often dwarf the final settlement amount.

However, it’s important to note what HNOA does not cover. For example, it does not cover damage to the driver’s personal car, which would require a separate commercial or ride-share endorsement on their personal auto insurance instead. It also doesn’t cover the delivery driver’s injuries, which are typically covered by Workers’ Compensation or Occupational Accident policy.

Implementation Checklist and Scaling Safely

Let’s start with a “quick reference” checklist for HNOA implementation, followed by in-depth best practices for scaling safely:

Verify Driver History: Run mandatory Motor Vehicle Record (MVR) checks for all new hires to ensure a clean driving record.
Audit Personal Coverage: Collect and maintain up-to-date proof of each driver’s personal auto insurance policy.
Define Operational Windows: Formally document “business use” hours (e.g., from job acceptance to final drop-off) to trigger coverage correctly.
Map Service Areas: Confirm with your broker that your policy limits extend to the entire geographic area where you operate.
Evaluate Liability Limits: Review if a standard $1M limit is enough; consider Commercial Umbrella or Excess Liability for catastrophic protection.
Consult a Specialist: Review your specific last-mile risks with an insurance broker to eliminate hidden “blind spots.”

The more specialized your insurance, the better. This is why, as with any coverage, you must perform due diligence when seeking HNOA insurance to make sure your company can get the best coverage possible. Among the vital steps you must take are running a mandatory Motor Vehicle Records check to ascertain a clean driving history. You must also require proof of the delivery driver’s personal auto insurance—even when it might not apply to claims for incidents on the clock.

On the topic of working hours, it’s crucial to know exactly when HNOA coverage will be triggered. This insurance will only apply during defined business use, which means founders must clearly establish the operational window of their delivery drivers (from accepting the delivery job until the drop-off is complete). Location is also relevant, so you must make sure that the insurance covers the full service area.

Then there are limits to consider. Because vicarious liability can be so severe, a standard $1 million limit may be insufficient in the case of major accidents, meaning HNOA wouldn’t be able to cover all of it. This is when, thinking of the worst-case scenario, it’s important to negotiate other coverages with your insurance broker, in case an accident causes significant damage, to arrive at a suitable deal. For example, you can discuss Commercial Umbrella or Excess Liability policies that can serve as a cushion for the HNOA limit and kick in as protection in case of catastrophes.

The Non-Negotiable Cost of Scaling Beyond Auto Insurance

The best way for delivery companies to forge a path toward success is by setting strong foundations that won’t cave when adversity hits, especially due to reckless behavior on the road. A risk management strategy is vital for this, covering every necessary risk factor—including those involving multiple parties—so your company can continue to operate during incidents. This is even truer in a risk-prone industry such as last-mile delivery, which has a high growth potential, granted you know how to navigate and overcome its challenges.

This is why, for instance, it’s important not to rely solely on your hired delivery driver’s personal auto insurance policy to cover liability if they get into an accident. This is a massive and unnecessary gamble—HNOA closes this critical gap.

This specialized insurance coverage shouldn’t be perceived as an extra expense, but rather as a foundation for scalable, responsible growth for your startup, whether you’re in the food delivery services sector, courier business, or other logistics solutions. It will allow you, among other mitigation strategies, to confidently expand your fleet knowing your business assets are protected.

Stop operating with blind spots. Contact one of our insurance specialists today to secure your HNOA policy and de-risk your last-mile operation.