Do I Need Special Insurance as a Delivery Driver?
Delivery drivers are very important to many businesses. While food delivery has been popular for years, since the start of the Covid pandemic in 2019, it has grown exponentially.
Even as restrictions continue to disappear and people begin to venture back to restaurants, the convenience and safety of having food delivered to your own home is not a trend likely to decline any time soon.
According to Reviewlution, Canada’s food orders amounted to $4.7 billion in 2019. With the increase in food delivery since the pandemic, the food delivery market is projected to reach $98 billion by 2027.
This increasing trend for delivery service is likely to continue and for businesses to keep up with orders, they’re going to continue to rely on delivery drivers. While some delivery service companies offer coverage policies to their drivers, the gaps in their coverage could leave you to your fate after an accident.
For this reason, you should make certain that you have commercial vehicle insurance before you get involved in the delivery market. This type of insurance protects commercial vehicles from various damages and third-party liabilities. It also protects you from legal obligations resulting from other people’s deaths, injuries, or property damage caused by vehicle use.
You should know that without the right coverage, you can end up in a financial mess if you get into an accident. In this article, we will look at the commercial vehicle insurance policies available to you at Ron Johnston Insurance as a delivery driver, as well as the best type for you.
What types of delivery driver insurance are available?
One thing you should note as a delivery driver is that it is not in your favour if you use your car for deliveries without the proper coverage.
If you’re at fault in an accident without the right coverage, you will have to pay for the damages out of pocket. However, if you want to be on the safe side, it would be wise to invest in business coverage.
Below are four commercial vehicle insurance options you can choose to cover yourself and your vehicle:
Business-use auto insurance: This policy can cover vehicles that your business owns, vehicles your business owns, hires, or leases, and vehicles for your business, including those your company does not own, hire or lease.
What the company covers depends on your choice. The insurance company will also take care of the damages if you are involved in an accident. They will help with the repair or provide rental cars if it’s available on your policy.
Commercial auto insurance: This policy charges higher annual premiums than personal auto insurance. This price also depends on your business and the type of car you own.
However, this policy assures you that you can be certain that insurance will cover any incident, including related legal expenses.
The policy typically covers car accident-related expenses, including damages to your vehicle or another person’s, damages to another person’s property, and driver and passenger injuries. You should note that this policy doesn’t cover you if you’re involved in an accident while driving your personal car.
Employers insurance: If you are working with a ride-sharing company, you should have insurance through your company. They will cover you in case of an accident within the policy limits.
However, if any damage exceeds their policy coverage, you will have to pay for those expenses yourself.
Hired and non-owned auto (HNOA) insurance: This policy covers accidents in personal vehicles used for work. It covers liability for the personal vehicles you hire or borrow for business use.
This insurance also covers vehicles that a company rents or leases. You should look at this policy coverage if a rideshare or delivery company offers limited coverage or leaves you entirely on your own for your insurance.
Will personal auto insurance work if I am a delivery driver?
Personal auto insurance will not work if you use your car as a delivery driver. This policy covers only your personal driving services.
When you use your car for anything apart from personal purposes, like delivering groceries, couriers, or pizza, you are in the position of a commercial driver.
For this reason, many personal insurance companies specify that you are not covered when you use your vehicle for commercial purposes.
As a result, they cannot take responsibility for the damages when an accident occurs in your personal vehicle.
What if my business relies on third-party delivery drivers?
Suppose you own a small business, like a restaurant or a grocery store, and you rely on employees or independent contractors to deliver goods in their personal vehicles. In this case, you may need certain types of commercial vehicle insurance.
For example, your drivers need a commercial auto insurance policy if they use personal vehicles to deliver goods or services because, as a business owner, you could be held accountable if one of your drivers gets involved in an accident while driving without the appropriate insurance.
In addition, you can add non-owner car insurance to your policy coverage. If an employee has an accident while operating a company car, this will cover personal injury and property damage.
However, non-owner auto insurance is for motorists who periodically use their personal vehicles for business.
You should also know that if these drivers regularly use their cars for delivery, they likely wouldn’t be covered under non-owner car insurance. However, a commercial auto policy will serve them better.
Benefits of Commercial Vehicle Insurance as a Delivery Driver
Physical damage and collision protection: Usually, you would have to pay for repairs for your vehicle and any vehicles if you encounter an incident on the road.
Commercial auto insurance can help repay people affected by a crash, regardless of who caused it. In many cases, this can cover uninsured and underinsured drivers, adding another layer of security.
Comprehensive coverage: This insurance covers losses that are not related to accidents, such as losses related to floods, theft, vandalism, and fires.
Covers medical payment and lawsuit: Collisions frequently result in physical injuries and high medical bills for you and other injured members.
Commercial auto insurance protects against these costs and may pay for your medical bills and legal defence fees if you face legal action.
Your Next Step as a Delivery Driver
The bottom line is that you need special car insurance as a delivery driver. Without business-use auto insurance, commercial auto coverage, hired and non-owned auto (HNOA) insurance, or employers’ insurance, you will not have coverage if an accident occurs during your delivery runs.
It is thus very important to discuss with your employer whether your company extends coverage to business and privately-owned employee vehicles. If not, you may have to buy your own independent commercial car insurance policy.