Auto insurance for food delivery services

Apr 12, 2024 | Business Insurance, Personal Insurance

Owning a restaurant and providing meal delivery entails significant dangers. However, the benefits of delivery, such as higher customer and revenue counts, outweigh these risks. Fortunately, you can control those risks by purchasing commercial auto insurance, which protects your company from unanticipated, unreported, and probably expensive claims.


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What Is Insurance for Food Delivery?

For those who deliver food, there is specialist insurance called food delivery insurance. Standard food business insurance, restaurant insurance, catering insurance, and other comparable plans do not apply to food delivery drivers. Carriers now provide food delivery insurance as a default measure of protection.


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It’s crucial to be aware that short-term food delivery insurance is offered. If customers don’t want coverage that lasts a year, they can choose to get insurance for hours, days, or months. Thimble and Zego are businesses that provide short-term meal delivery insurance.


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It’s crucial to understand that your restaurant is responsible for any injuries or property damage caused by delivery accidents that result in injuries to people or damage to other people’s vehicles or property. Commercial fleets experience about 20% of annual accidents, which is both expensive for firms ($70,000 on average) and frequent.

What is auto insurance for hired and non-owned vehicles?

HNOA insurance pays for liability costs associated with accidents involving cars that your restaurant uses for business but does not own. This covers vehicles that your company rents as well as personal automobiles utilized for delivery by your personnel.


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The company holds the listed insured position under HNOA insurance.

Although insurance providers can also include it in your business owner’s policy or other restaurant insurance packages, they commonly add this coverage to your commercial auto policy. Typically, an HNOA policy covers liability claims and defense expenses. If a restaurant faces a lawsuit due to the incident, the insurance can cover legal costs, settlements or judgments, and other court expenses. Furthermore, these policies may cover both part-time and full-time employees.


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Cost of Food Delivery Insurance

A $1 million general liability coverage costs $40 per month or $480 per year for food delivery services. It is significant to know that a number of factors affect how much food delivery insurance costs. For instance, your location could have an impact on the price.

Some states govern the bare minimum of insurance that meal delivery services must carry. Residents of states with higher standards might anticipate higher premiums.


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Cost of Food Delivery Car Insurance

A automobile insurance delivery driver costs about $62.5 per month or $750 annually. However, bear in mind that a number of factors affect how much food delivery car insurance costs.

For instance, the kind of vehicle you employ for food delivery influences the cost of insurance. A minivan is less expensive to insure than a hatchback. Location and driving history are further factors.


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Given that food delivery requires the use of automobiles, the cost of your insurance also heavily depends on your driving history.

Having a history of intoxicated driving increases the likelihood of being involved in collisions, resulting in higher insurance coverage costs.


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It is also important to keep in mind that different food delivery insurance policies have different coverage limitations and deductibles, which have an impact on how much your insurance will cost. Therefore, when planning your budget for food delivery insurance, take into account all of these considerations.

Remember that company insurance is more expensive than a typical personal insurance policy. The price of your current insurance policy could increase if you ask a carrier to include food delivery insurance or a business coverage in your personal plan.


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Coverage for Food Delivery Insurance

The two types of food delivery insurance that are most frequently used are:

Liability protection

Business auto insurance


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Insurance for Food Delivery Liability

Food delivery insurance provides protection from lawsuits requiring the policyholder to pay for any physical injuries or property damages of the concerned party by including food delivery liability coverage. Food deliverymen most frequently obtain the following types of liability insurance:

Public liability protection

Insurance for goods and completed operations

Standard Liability


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Men who bring food work rapidly. Even when their employers give them safety training, mishaps can still occur. For instance, a delivery person may run into someone while delivering food and hurt them. In this circumstance, public liability insurance proves helpful by providing funds in the event that the harmed party seeks reimbursement.


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On the other hand, if a consumer claims that a delivery person ate their meal, then the goods and procedures are now helpful. One in four delivery men have admitted to tampering with a customer’s food, according to the frequent accusations made against them.


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Products and finished operations assist by giving the policyholder the funds necessary to pay the injured party’s damages. Food delivery workers often lose $1,442 due to claims of meal tampering, but hot food delivery insurance may assist cover these costs.


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Insurance for delivery drivers’ commercial vehicles

As the name suggests, business auto insurance for food delivery drivers safeguards the vehicle used to transport clients’ food. However, keep in mind that in practise, carriers insure all 4-wheeled vehicles used for delivering meals, with the exception of taxis and other specialty vehicles, such minivans, pick-up trucks, and many more.


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The following are the purposes of commercial auto insurance for food delivery:

Provide funds in the event that the policyholder causes a car accident while delivering a delivery and is liable for the victims’ personal injuries and property damage.

If the policyholder suffers a traffic accident while operating the vehicle to make deliveries and needs money for hospitalisation, provide it.

Pay the policyholder money if vandalism, theft, hail, a falling object, or a collision with an animal damages their car.


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Due to the high frequency of food delivery incidents, this policy in business insurance is crucial.

Research from the Workers Justice Project supports this, revealing that 245 out of 500 food delivery workers experienced car crashes or other mishaps while on their way to customers.

Additionally, most delivery personnel typically have to pay $2,462 in damages and compensation for personal injury when they injure another person.


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In spite of this, not all modern trucks used for food delivery are four wheels. In actuality, motorcycles and electric scooters are more widely used for delivery services. Are these covered by commercial auto insurance? No, is the response. Food delivery insurance for motorcycles and scooters, which has the same coverages as commercial auto insurance for food delivery, is what offers coverage.


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Does workers’ compensation insurance cover food delivery drivers?

No, in the majority of instances, insurance for food delivery drivers simply provides liability and commercial auto coverages.

Food delivery drivers seeking coverage against work-related accidents may opt for standalone workers’ compensation insurance. In light of the fact that services like UberEats, Postmates, and Doordash treat its delivery personnel as independent contractors and do not offer worker’s compensation insurance, doing so is a wise decision.


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