Delivery Insurance: Hospitality Or Not?

Whether delivery is considered hospitality on insurance is a complex question. Delivery drivers need additional coverage on top of their personal policies to fill in the gaps where the company won't cover them. Most personal auto insurance policies don't cover delivery drivers without coverage add-ons, so drivers should consult their local insurance agent to understand their options.

If you're delivering food for a company like UberEATS, Doordash, or Postmates, it's important to remember that using your vehicle for business and transportation of goods is typically not allowed under a personal auto insurance policy. As such, delivery drivers may need a commercial auto insurance policy, as food delivery is considered business use of the vehicle.

Commercial insurance policies are more expensive than personal policies because insurance companies deem business use to be a higher risk. However, commercial policies provide peace of mind that any incident will be covered.

Commercial auto insurance for delivery drivers

Commercial auto insurance is a necessity for delivery drivers, as personal auto insurance policies typically do not cover driving for work. Food delivery is considered "business use" of a vehicle, which is deemed higher risk than personal use by car insurance companies. As such, delivery drivers need to purchase additional coverage to ensure they are protected in the event of an accident.

There are two main options for delivery drivers: a rideshare endorsement or a commercial insurance policy. A rideshare endorsement can be added to an existing personal auto insurance policy, and covers the driver during the period when they are waiting for an order. However, this type of policy may not cover all types of delivery drivers, and is more suitable for those who also drive passengers.

A commercial insurance policy is more expensive, but provides greater protection. This type of policy is designed to cover businesses and their vehicles, and is necessary for full-time delivery drivers. It is also useful for small business owners who use their vehicle for business, although it may not cover employees using their own vehicles.

Some delivery companies offer insurance for their drivers, but this varies depending on the company. For example, Amazon Flex provides drivers with a commercial auto insurance policy, while GrubHub requires drivers to have their own car insurance and does not provide any commercial coverage. It is important for delivery drivers to understand the insurance policies of the companies they work for, and to ensure they have adequate coverage.

Overall, commercial auto insurance is a necessary investment for delivery drivers to protect themselves and their vehicles while on the job.

Personal auto insurance for delivery drivers

If you're a delivery driver, it's important to understand the coverage on your auto insurance policy. Most personal auto insurance policies do not cover delivery drivers without coverage add-ons. That's why drivers should reach out to their local insurance agent to know their best options.

Delivery driving is considered a business use of a vehicle, not personal use. Car insurance companies see business use as a higher risk than personal use, and charge higher rates accordingly. Delivery drivers are more likely to get into accidents and file car insurance claims.

If you start driving as a job (whether full-time or as a side hustle) and don’t tell your auto insurance company, you could face a claim denial in the future if you cause an accident.

Failure to disclose your delivery driver activities to your insurance company can lead to complications or denial of coverage in the event of an accident or claim. It’s important to be transparent with your insurer to ensure you have the appropriate coverage for your needs.

In the event of a collision, your company’s insurance policy might also protect you, but it probably only covers liability claims. To cover damage repair costs, you must have collision insurance.

If you get into an accident while on the job, your personal insurance company could deny coverage, meaning you could be stuck with property damage and medical bills.

There are a few options for delivery driver insurance:

• Rideshare insurance policy: If you get into an accident while delivering for a transportation network company (TNC), most rideshare companies will cover the damages to any other cars, but if you’re at fault, they may not cover your vehicle’s damages. This is where rideshare insurance from an insurance company comes in.
• Commercial insurance policy: If you’re a delivery driver, you may need a commercial insurance policy to help cover you when you’re on the job. A commercial policy is more expensive than a personal liability plan because insurance companies see this as a business use of the vehicle.
• Business-use auto insurance: People who only sometimes use their cars for business purposes should purchase business-use auto insurance coverage. Drivers who use their vehicles for purposes other than food delivery are also covered by business-use insurance.
• Business-use endorsement: A specific business usage endorsement is frequently offered on personal policies to help part-time delivery drivers save money on insurance. Companies like State Farm and Erie offer business-use add-ons to provide that additional coverage when you’re in between deliveries but still at work.

The cost of delivery driver insurance depends on a number of factors, including your age, location, vehicle and driving history. Adding rideshare coverage will increase your insurance rates by 15% to 20%.

Insurance for seasonal delivery drivers

If you're a seasonal delivery driver, you'll still need to protect yourself with insurance. However, a commercial driver policy or a business-use policy might not make sense for you. Instead, you can add a business-use endorsement to your personal coverage plan for the time that you're driving. Depending on your insurance provider, you can add or drop the endorsement by contacting your insurance agent or changing your policy online. Endorsements are the most affordable way for seasonal drivers to protect themselves.

• Progressive offers rideshare insurance as an add-on to your personal car insurance plan. This coverage is required if you deliver for a company.
• USAA offers rideshare gap insurance coverage to make sure you’re covered while you’re waiting for a delivery order or a passenger.
• State Farm offers Rideshare Driver Coverage for people who drive for apps like Uber or Lyft, but according to the carrier, all you need as a delivery driver with State Farm is a “business use” notation on your personal auto policy.
• Allstate offers specialty coverage called Ride for Hire. It offers coverage for delivery drivers and rideshare drivers. Ride for Hire is extra protection that you can add onto an existing policy.

Insurance for small businesses with delivery drivers

If you own a small business that relies on delivery drivers, you should consider investing in commercial auto insurance. This type of insurance provides liability protection for drivers who get into an accident in a company-owned vehicle. It covers property damage, physical injuries, and related legal expenses. It can also cover medical expenses if a driver is injured in an accident.

If your delivery drivers use their personal vehicles for work, their personal auto insurance policy will not cover them in the event of an accident. In this case, you should consider hired and non-owned auto insurance (HNOA). HNOA covers accidents that occur in personal vehicles used for work. It can also apply to vehicles rented or leased by your business.

In addition to commercial auto insurance and HNOA, there are other types of business insurance that provide financial protection for delivery drivers:

• General liability insurance: This offers financial protection from third-party accidents and lawsuits.
• Commercial property insurance: This covers the cost of repair or replacement of your business space and assets if they are stolen or damaged.
• Business owner's policy: This combines general liability coverage and commercial property insurance in one policy, usually at a lower cost than buying each type of coverage separately.
• Workers' compensation insurance: This covers medical costs and lost wages for employees dealing with work-related injuries or illnesses.

Hired and non-owned auto insurance for restaurants with delivery drivers

Hired and non-owned auto insurance (HNOA) is a type of liability insurance that covers accidents involving vehicles used by a business but not owned by it. This includes rented vehicles and employees' personal vehicles.

During the COVID-19 pandemic, many restaurants began offering delivery services, with employees using their own vehicles to deliver food. This raised insurance issues for employees, as personal auto policies typically do not cover vehicles used for commercial purposes. In response, the Office of the Commissioner of Insurance (OCI) mandated that insurers not deny claims under personal auto policies solely because the insured was delivering food on behalf of a restaurant impacted by closures. OCI also ordered insurers to notify restaurants with commercial general liability coverage that HNOA coverage was available if requested.

HNOA insurance is important because it helps businesses avoid paying for auto liability lawsuits, which can be financially devastating, especially if someone is injured. It covers property damage liability and bodily injury liability.

HNOA insurance is typically added to a business's general liability insurance policy. However, it can also be purchased separately, and doing so may lower insurance rates.

Restaurants with food delivery drivers can benefit from various types of business insurance, including commercial auto insurance, non-owned and hired auto insurance, and general liability insurance. Commercial auto insurance provides liability protection when drivers get into an accident in a company-owned vehicle, while HNOA insurance covers accidents that occur in personal vehicles used for work.

The cost of HNOA insurance depends on several factors, including employee driving records, policy deductible, and limits.

Frequently asked questions