Ghost kitchens in New York usually need general and products liability for every virtual brand they cook, hired and non-owned auto (or full commercial auto if they run their own drivers), property and spoilage coverage that matches the terms of a shared-kitchen license, and workers’ compensation plus disability and Paid Family Leave from the first employee. Cyber coverage matters because every order comes in online.
This page is for delivery-only operators: a single cook line in a Queens commissary that runs three app brands, a restaurant group spinning off a virtual concept, or a Long Island prep kitchen feeding meal-kit subscribers. Nobody sits down to eat, but your food still travels miles to strangers, and that shifts where the claims come from.
Delivery drivers, shared kitchens and the New York rulebook
If your own employees deliver, New York’s auto rules apply to whatever they drive. The DMV minimum liability is 25/50/10, plus 50/100 for death (in thousands of dollars), and the DMV does not accept out-of-state insurance on New York-registered vehicles. When staff use their personal cars, the owner’s personal policy may exclude delivery use, and an injured third party will often look to your business next. That is exactly the gap hired and non-owned auto coverage is designed to fill. If you rely only on app platforms’ contracted couriers, read the platform agreement carefully, because those drivers are typically not your employees and your policy will not treat them as such.
Workers’ compensation has no employee minimum in New York. It covers everyone under your direction and control, including part-time prep cooks and a relative packing bags on Friday nights. DBL and PFL coverage is required too, starting four weeks after an employee’s 30th day of employment. Local health departments want evidence of both before issuing a food service establishment permit. In New York City, DOHMH requires a supervisor with an NYC Food Protection Certificate on duty during all hours of operation, and establishments receive posted letter grades. For a kitchen that runs late shifts, staffing that certificate holder around the clock is an operational cost worth planning for.
How delivery-only kitchens rack up claims
The typical ghost kitchen claim has nothing to do with a customer slipping in the dining room, because there isn’t one. Instead:
- A bowl from your plant-based brand leaves the line with the wrong sauce, and a customer with a nut allergy is hospitalized. The app shows your kitchen made it.
- A part-time driver rear-ends a cab on Northern Boulevard while delivering in his own sedan, and his personal carrier denies the claim for business use.
- The shared commissary’s walk-in fails over a July weekend, and you lose three brands’ worth of protein.
- Your online ordering account is hijacked and payouts are redirected before anyone notices.
- A grease fire at a neighboring tenant’s station shuts the whole facility for two weeks.
Label accuracy is the quiet exposure. When one line cooks for several menus, mix-ups between brands become products-liability claims. Our page on allergic reaction claims explains how those are typically handled.
Commissary licenses and what your landlord will ask for
Most New York ghost kitchens operate under a license or lease with a commissary operator. Expect the agreement to require that the operator be named as an additional insured, that your policy waive subrogation against them, and that you carry specific liability limits and property coverage for your own equipment and improvements. Read the indemnity clause closely, because some agreements make you responsible for the facility’s losses that start at your station. Downstate, ask whether the building sits in a flood-exposed area. Sandy showed how quickly basement and ground-level kitchens near the water can go under.
Coverage lineup for a New York virtual restaurant
- General liability — vendor, courier and inspector injuries at the pickup counter, plus damage to the shared facility.
- Products and completed operations — illness, foreign objects and allergen mislabeling across every brand you cook.
- Hired and non-owned auto — employees delivering in their own or rented vehicles.
- Commercial auto — if the business owns or leases delivery cars or vans.
- Business personal property and tenant improvements — your equipment, packaging stock and any build-out in the commissary.
- Spoilage and equipment breakdown — refrigeration failures and power loss.
- Business income — sales lost when the facility closes after a covered loss, including dependent-property options where available.
- Cyber liability — account takeovers, payment data and ransomware affecting ordering systems.
- Workers’ compensation with DBL/PFL — mandatory for every employee.
Underwriting a kitchen with no dining room
Carriers price ghost kitchens on sales volume, the number of brands and menus, cooking methods, and above all who delivers. A kitchen handing everything to third-party couriers presents a very different auto picture than one with its own fleet. Underwriters also want to see the commissary agreement, fire suppression and hood-cleaning records, and your allergen controls. To improve terms, keep brand recipes and labels in a documented system, separate allergen prep, collect driver records and require delivery staff to carry personal auto limits, and use multi-factor authentication on ordering accounts.
Quoting through Provident Financial Group
As an independent agency, we take one application and compare multiple carriers side by side, then send the commissary the certificates and endorsements it needs as soon as you bind. Call (866) 964-6660 to talk it through.
Frequently asked questions
Do app delivery drivers count as my employees for workers’ comp?
Contracted couriers engaged by the platform typically are not your employees, but anyone you hire and direct to deliver is. If your own staff deliver, both workers’ comp and hired and non-owned auto should be in place.
Which New York comp class applies to a delivery-only kitchen?
New York uses its own class system through NYCIRB, and the fast-food code 9072 includes delivery operations. The final classification is up to the carrier and NYCIRB based on how your operation actually works.
If the commissary floods, is my food covered?
Your own policy can cover your inventory and equipment for covered causes, but flood is usually excluded unless you buy separate flood coverage. Check this carefully if the facility is below grade near the water.
Can one policy cover all my virtual brands?
Usually yes, provided every brand and menu is disclosed on the application. An undisclosed brand is a common reason claims get disputed.
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