Do You Need Business Insurance To Deliver Pizza?

Delivery drivers naturally face more risk of car accidents than other professions, due to increased time on the road. But making deliveries without car insurance or with inadequate insurance could be ruinous to you and potentially your employer in the event of an accident. Your own existing personal auto insurance will not be sufficient, and many employers do not provide insurance to their drivers.

You do need business insurance to deliver pizza. Business auto insurance provides coverage for accidents that are your fault while you’re making a delivery. Your personal auto insurance won’t cover these accidents. Some companies offer versions of business insurance tailored specifically to delivery drivers, so you’ll want to research multiple companies to find a policy that meets your needs.

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Why can’t I make deliveries under my personal auto insurance?

Business (or commercial) auto insurance protects you in case you get into an accident that’s your fault while you’re performing specific work-related activities using your vehicle. If you’re taking food from the restaurant to a home, you’re covered; if you’re on your way home from work at the end of a shift, you’re back to being covered by your personal auto insurance policy.

In some cases, your insurance company may offer a business-use add-on endorsement to your personal policy; other companies require a separate business auto insurance policy altogether. As the gig economy expanded, options for insuring delivery drivers expanded as well, so you’ll want to comparison shop to find the best solution for your situation.

What is business insurance?

Personal auto insurance is provided under the assumption that you’ll be on the road for a typical average number of hours based on your demographic. But if you’re using your own vehicle to make deliveries, the number of hours you’re on the road rises significantly, as does the amount of time you might be driving in inclement weather conditions.

You’ll also be pressured to make timely deliveries, which may impact your driving decisions; your average speed may increase on these trips, for example, or you may be more prone to slipping through red lights. And you’ll more often be on the road during busy traffic.

These risk factors are far beyond the assumptions that are baked into your personal auto insurance policy, which is a contract between you and your insurance provider.

Won’t I be covered under my employer’s insurance?

That depends on whether you’re driving your own car or a company-owned vehicle.

Tip:
If you are delivering pizza for Uber Eats, DoorDash, Foodora or another food delivery service, see this article on what kinds of insurance they provide their food curriers.

If you’re driving your own car:

Ideally your employer would have liability insurance that fully covers drivers, but many employers don’t offer this, and even those who do may not offer an adequate amount to cover you fully. Speak to your employer to clarify exactly what coverage is available to you as an employee, then factor that into your research as you talk with insurance companies about getting your own business insurance.

If you’re driving a car owned by your employer:

In this case, your employer is required to have commercial auto insurance that covers you if you cause an accident.

What happens if I don’t get business insurance?

If you make a claim on your personal auto insurance for an accident you cause while driving for work, your insurance company might pay the claim, but they’ll likely also drop you as a customer. Your insurance company might instead deny the claim outright and drop you as a customer, leaving you personally responsible to pay for damages and injuries.

If you can’t afford these costs, you – and your employer – may get sued by the other driver.

If you fail to indicate that you were driving for work when you initially make the claim, your insurance company may accuse you of “misrepresentation,” a type of insurance fraud that can lead to the above outcomes as well as potential criminal charges. Traffic violations can accrue for driving without the correct insurance as well. And if you’re driving uninsured, you’ll likely lose your driver’s license.

How much does business insurance cost?

Just like personal auto insurance, the cost of business auto insurance is affected by a wide range of factors, including the driver’s age, driving history, vehicle type, where you’re primarily making deliveries, and your state’s minimum coverage requirements (you’ll probably want to exceed those minimums).

Every delivery driver on the road in the same position. The COVID pandemic has increased the demand for delivery services. Insurance companies have focused on providing tailored packages for delivery drivers that ensure you’re covered while working. Call your current insurance agent and discuss your intent to use your own vehicle for delivery driving and learn what options are available to you as an existing customer.

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Quick Review

Do you need business insurance to deliver pizza? Your personal auto insurance does not cover you while working a delivery shift. You need a business-use add-on to your existing insurance, or new business insurance, to ensure you’re covered in the event you cause an accident while working.