That is similar to our situation. We pay a bit less than $5,000 I think. It does not seem to matter if we have one car or two or three… it is the delivery total and the delivery radius that drives the cost for us regardless of the number of cars or whether they belong to us. Quote was the same for just Hired and Non-owned if we wanted to go with only employee vehicles. When I asked why the explanation was that the risk was the same; the store would be named in any serious suit and the driver’s coverage would not protect the interests of the business or its owner (me). The insurance company just assumes that the driver will not have coverage and that the liability will fall back on the business. In any case, once named the business would be on the hook to defend itself and even if it prevailed the cost would be substantial.
What I have learned over the years with regard to this is that a restaurant which does only a small percentage of business in delivery such as occasional catering gigs can get hired and non-owned coverage added for the kinds of fees mentioned in some posts above but that coverage for delivery based businesses in our industry with meaningful policy limits is quite expensive. Over the last 17 years I have shopped the insurance about 4-5 times. Always the same results. Way back it cost only $2,500. Then it jumped from there to $6,000 in a single year and most of the companies in the business exited the sector leaving only and handful that would write coverage for pizza delivery. At that point we had NEVER had a claim. Since then, we have had one claim for about $7,000 (10 years ago now and guess what… it was an employee car which, it turned out, did not have insurance despite our asking for and getting copies of the proof of insurance) Since then, by shopping, I was able to find coverage for about $4,000 and it has gradually risen from there to where we are today. In that time we have had coverage from 4 different companies.
A few years ago when the rates jumped and I was shopping coverage I called on all the other delivery places in my town to ask where they were covered to see if they had any good suggestions. I was shocked to find that with the exception of the national franchises NONE of them had hired and non-owned. They told me that they “required their drivers to have coverage” and in one case that the drivers were contractors. Amazing to me that so many in our industry are willing to risk the very existence of their business as well as all the owner’s personal assets to save $4,000-$6,000 in insurance expense.
There are only a few underwriters that write Pizza Delivery coverage for Delco operations. The prices are high. If you use employee owned vehicles and you do not have a company owned policy which clearly recognizes that you are in the pizza delivery business you are likely to be in for a rude surprise if there is ever an accident. The driver’s policy will not protect your interests and the basic business insurance, even with a hired and non-owned add-on, will possibly decline coverage if your description of business activities covered did not include an accurate representation of your delivery business. You can expect that your business will be audited to determine how much delivery you do and if you claimed it was less than 20% of sales in order to get cheap coverage and it turns out that you do 40% or 60% or 80% the insurer will drop you like a hot screen.
Some interesting reading:
Plenty more if you google “pizza delivery insurance”