Small biz delivery

we have almost made it a year!!! Thanks think tank!!

So we are looking at delivery. We got quoted 50$/month more thru State Farm. That seems really low and I thought State Farm didn’t offer it. We are asking questions.

That being said…we have around 800 sq ft to work with. We have clover pos. Only one register. Looking at 15min drive for delivery distance correct. Should we print a huge map for our coverage area. And do drivers go off map. Assuming most will have gps but not requiring it so to cover just in case.

How do drivers communicate they’re location to give accurate wait times.

We were thinking credit card payments only to protect our drivers. They can cash tip of course.

No cash on delivery? The people who would consider robbing them would not know that, and I’d see it being a huge inconvenience to customers that prefer cash transactions.

That’s a very good point actually…

I am pretty sure State Farm does not write coverage for pizza delivery and the cost of hired and non-owned for the restaurant is going to be a LOT closer to $500 per month than to $50 per month. I hope I am wrong though! I would switch to State Farm in a minute to save $4000 per year.

We actually get our insurance through state Farm and they don’t do the coverage themselves they are basically a middle man and get another company to write the plan for them. They are very reasonably priced. We use them because all of our other business and personal insurance is through them

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A separate auto insurance policy for hired and non-owned coverage on pizza delivery? The local State Farm office here tried to quote for us and could not. The could write a pizza restaurant, even ours, but the policy would exclude delivery coverage. That is what many owners actually do… just fly naked assuming/hoping that the auto insurance the drivers have on their own cars is enough.

A standard restaurant business policy will cover hired and non-owned auto for a business that does not do delivery… It covers the interests of the business if an employee runs to Safeway because they are out of potatoes but every time I have looked into it they all very clearly exclude delivery businesses or at least businesses whose revenue is significantly made up from delivery. (as opposed to catering for example).

@bodegahwy they don’t write the policy themselves they work with an insurance company that does it.

Yes, I get that. Perhaps they have access to different products in a different state or things have changed since I spoke with them. How much is your delivery coverage? $50 per month?

It’s definitely not 50 per month I would have to check my bill as I get auto billed all of my insurance coverage in one sum but it’s closer to 200 I believe

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Still a really excellent rate. Most policies that I am familiar with and from comments here on the TT over the last couple of years come in around $4,000 - $6,000 per year which comes to $333 to $500 per month.

Note to original poster: You really need to check what that $600 per year policy is for. I really doubt you are getting Hired and Non-owned coverage for pizza delivery that protects your business interests at that rate. That looks to me more like a personal auto policy rate.

Bodegahwy I pay $500 a year for both Hired and non owned delivery coverage through Farm Bureau insurance of Idaho. It has a stipulation that nobody under 21 can deliver though.

I have 2 company owned vehicles with 1 million coverage . Costs $6000 for the year.

Years ago, I was paying $10,000 a year.

A good insurance agent should be able to get you many quotes …

If I remember, there are only a handful of carriers that insure pizza delivery…

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We have all of our personal insurance through state farm, so when we call for quotes on commercial policies, our agent basically tells us that he knows his rates are going to be way out of line, and suggests we look at other companies for a quote instead. At least he is honest.

That is amazing. Nothing like that here for a restaurant that actively does delivery. A restaurant that occasionally does catering can get that in Colorado but once you say “pizza delivery” it jumps to at least $4,000.

So your business does not have coverage?

Where did you come up with that out of my statement?
Of course we have insurance coverage,

We just use another insurance company(s) for our commercial insurance,

Sorry… I understood you to mean that the cars were covered just by the employees own coverage from State Farm. Reading too quick I guess.

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”

You mention 15 minutes drive time for delivery - I hope that you are referring to round trip! We set our delivery area up with an 8 minute drive time zone. This allows us to get 90% of deliveries to houses within 30 minutes of ordering. We believe the key to our growth has been quick delivery times to our customers. Plus, the MAJORITY of your business will be coming from within 1.5 miles of your shop. Do you want to make close customers mad / order late because your driver has to drive 30 minutes round trip for another delivery? No Way!

Insurance specifically to cover drivers;

I believe it was a few years, a member of this forum lost his business, and I believe they were also fighting to try to keep their home due a to wreck that one of their delivery drivers was involved in.

The driver had personal coverage on his car, and paid extra for his policy because he did use his vehicle for delivery, so he wasn’t lying to his insurer and rolling the dice,
But, the business owner did not have an added policy to cover drivers liability. The attorneys for the plaintiff did get the business assets in the settlement.
Now I believe this brings up another very important item, “INCORPORATION” as opposed to “sole proprietor” or some other small business structure that allows your personal and business liabilities/assets to intermingle. I believe if this individual had a different business structure, that the plaintiffs attorney may have still gotten their business assets in the settlement, but his personal assets would have been untouchable.

This next part, I am going off hearsay only as I have heard (not verified yet) that if you break that barrier between business and personal by using your personal tax info (SSN) for business credit purposes, or your credit card processor requires your personal SSN be attached to your corporate merchant account, that commingling of personal and business can lead to that barrier between business and personal to be breached.
Again, I am not an attorney, I have not verified this with a corporate attorney, I am just putting this out there for people to be aware of so they can protect themselves if a driver or other business liability ends you up on the wrong side of the courtroom.