Postal Letter

Liability insurance for small pizza delivery business?

Do I need any kind of special liability insurance for a small pizza delivery business? My delivery drivers will drive their own insured cars not company owned vehicles.

Public Comments

1. Yes, you need hired and nonowned auto liability to cover the business auto liability. That's because personal auto policies don't COVER pizza delivery, and your delivery drivers aren't going to buy commercial policies to cover them, so when there's an accident, and their personal policies deny the claim, you WILL be sued. You also will need to buy workers comp coverage, and product liability in case someone gets food poisoning.
2. Add as a rider to your business insurance policy hired and non-owned vehicles. If one of your employees is driving their own car, you are still liable if there is an accident during the course of delivery. His/Her personal auto policy excludes deliveries of anything for a fee, so your's is going to be primary. This is very important, and I'm glad you asked so you can be properly protected.
3. As stated in the 2 previous responses the answer is yes. You need whats called Non-owned auto liability. (hired auto is not necessary in this scenario and I think most agents are just accustomed to saying Hired & Non-owned). Basically you do not own these vehicles but you are still at risk for any potential claims that arise from your employees driving their own vehicles. Usually non-owned auto coverage is an incidental exposure and very affordable to purchase. In this case it is not because it's a primary operation and in no way incidental to your business. Odds are this coverage will be your most expensive insurance cost. Also as previously stated your employees personal auto coverage will specifically exclude any business ventures. So coverage can not and will not be covered under their policy, so at the end of the day you will be the one getting sued. In fact some personal auto companies will not insure people that do pizza delivery (keep that in mind). Other then that a standard BOP (business owners policy) covering your liability and small amount of property coverage should suffice along with any state mandated workers compensation coverage for bodily injury/sickness to your employees. Hope that helps!