Think twice before saying “yes”

As the Coronavirus tightens its grip on our region and the statewide “social distancing” campaign swings into full force, we have already noticed an increased number of restaurants adding delivery options and asking employees to engage in delivery. This is a great way to for restaurants to stay afloat and get their food out to clients who don’t want to venture out in public. However, asking employees to deliver poses a big insurance risk to both the employer and the employee.

The problem arises when the driver gets into an accident – the employee’s personal auto policy will deny coverage because personal auto policies specifically exclude coverage when the driver is delivering food, or other products, and getting paid to do so.

While employers can often simply add a “Hired and Non-Owned Auto” endorsement to their commercial insurance policy to protect their liability, it’s not so simple for the employee.

Currently, no personal auto insurance policy that we know of, has any type of endorsement that can be added to cover food delivery. That means that if you were to get into an accident while in the act of delivering, you could be held personally liable for any injury to another driver and for the damages to their vehicle.

So what should I do to protect myself if I want to deliver food?

First, I would make sure that your employer has Hired and Non-Owned Auto coverage on their business policy. If they don’t, then do not deliver food for them until they do.

The next thing I would do is to check the cost for you to buy a Commercial Auto Insurance policy that would cover you to deliver food. This will range in price based on your age, driving record and amount of coverage you choose. For example, I just quoted myself, a 39 year old with a clean record and the premium was about $1200/6 months for full coverage. Somewhat expensive but could easily be paid for in tip money alone if I do a lot of deliveries. If, however, I reduce my age to 19, the premium is now nearly $4000/ 6 months! That’s a lot of tips.

Once you have those facts and numbers, now you at least have enough info to make an informed decision of the risk and the costs associated with minimizing that risk.

But wait, what about pizza delivery, Door Dash and Uber eats?

Delivery for a pizza restaurant follows the same rules as above. You aren’t covered on your personal auto policy while delivering pizzas. The restaurant should have liability coverage, but double check if you are working with a small local pizza shop.

Door Dash and other online food delivery services are similar. They will often carry a policy to cover the injuries and damages to vehicles or property that you hit while driving for them. If you are driving for one of these services, be sure to ask what coverage does exist.  Generally, while they often have coverage to protect the company, they offer no coverage for your vehicle. So if you wreck your car, you will be out of luck without that commercial auto policy.

Does this apply to other types of delivery?

Typically, the rule is – were you paid to do it?  For example, your company normally doesn’t need staff to drive around on their behalf, but in the current environment you may be asked to deliver materials or documents to someone working at home, perhaps deliver equipment to an employees home while they set up a remote office and a huge variety of other scenarios that put you behind the wheel of your personal auto on behalf of your employer. Many businesses do have the coverage on their policies (and if not they should) so just ask your employer.

The bottom line

While it can be very tempting to do delivery either as a full time job or a side hustle, you need to understand the risks before you even take one trip – is it really worth losing everything for you or whoever owns the car your driving? Keep in mind if you are driving a vehicle owned by someone else, such as a parent or roommate, you are putting them, and their financial future at risk. If you have more questions or would like to see what the cost of a Commercial Auto policy would be, we are here to help.  Click here to contact us!