Eons ago, when I was looking into delivery, I found out that “drivers carry their own insurance” is basically a scam, or perhaps I should call it “wishful thinking”. This is because someone’s personal insurance will NOT cover an accident happening in the course of your work. Which means that YOU, the Pizza shop owner, are 100% liable for any accidents that happen to your delivery personnel. And if you don’t carry such insurance, you’re screwed. So. Is this still true? Or did something change? The question arises after reading yet another article that mentions…“our drivers carry their own insurance”…
You need to carry Non Owned Liability insurance to cover the your drivers damaging/hurting someone else. If I am correct it does not cover damages to your drivers vehicle. Your drivers SHOULD carry insurance that covers pizza delivery specifically.
I own the vehicles that we use for deliveries and the coverage for them is more than double what my personal vehicle is.
Their personal insurance will not cover an accident while working only if their policy has a built in exclusion for incidents arising out of a delivery. The underwriters of my non-owned delivery-vehicle liability insurance (Illinois Casualty Company) provide me with a list of carriers that write such an exclusion into their policies. I’ve had to make several drivers switch companies in the past before I could hire them.
When using their own vehicles, drivers are the responsible party in any insurance claim. However, you are always going to be passively liable as they were on the clock working for you. That means that if there is a shortfall to the coverage or payout in a claim or the driver allowed their policy to lapse your company will be dragged into the matter. For these reasons, you must have liability insurance.
People that claim a “driver’s own insurance is enough” are flirting with disaster.
The driver’s policy for their own cars does not cover you or your business. If there is an accident with injuries, serious property damage or fatality, you can count on being named and your general business liability is not going to cover you.
You need to buy hired and non-owned converage to protect yourself or you risk loosing everything. Even defending yourself from a suit that you eventially win could bankrupt many small businesses. Your coverage will NOT cover the driver’s vehicle… a fact that many drivers do not understand… so when something happens to their car, they look to you to make it right.
- Explain to drivers in writing that they are responsible for coverage of their own car.
- Buy insurance to protect yourself.
Hired and non-owned is expensive. You can expect it to run 4-6K for most indi operators.
You do need to carry an insurance umbrella in case a driver gets into an accident and their insurance company won’t cover it. Let me let you in on a little secret. I actually did alot of research on this subject and you should check this out on your own. If you hire drivers who carry Allstate or State Farm Insurance, you are ok. Neither of these companies have stipulations in their declarations that deny coverage for pizza delivery. Also, there are companies that provide commercial insurance coverage that your drivers can purchase for not all that much more money than a standard policy. While it may sound like an uphill battle to make your drivers purchase insurance from Allstate of State Farm, make it happen! Do not hire drivers that carry a policy from Farmers, Progressive, or any of the high risk insurance companies. When you hire a driver, fax your insurance company their MVR to make sure you are protected. I also recommend running MVRs on your drivers every six months.
I would echo clark’s comment about periodic MVRs, insurance certificates and drivers licenses. Over the years I have encountered drivers who had let the insurance lapse or had lost their licenses but never said a word…
Not checking these items could be construed as negligence which would go a long way for an attorney trying to transfer liability from the driver to… you.