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How Does Delivering Food Affect Your Insurance Coverage?

How Does Delivering Food Affect Your Insurance Coverage?

Good Morning,

I hope September finds all of you well.  Whether you are transitioning with kids headed back to school, waiting for fall and winter, or getting ready to pack up and head south for the winter, we hope you have had a chance to enjoy the weather.

I wanted to take a moment and talk about food delivery. We have had some calls or found out in conversation that a number of clients are considering or already doing GrubHub, Uber Eats, DoorDash, or other food deliveries.  Let’s take a minute to unpack how this might affect your insurance coverage.

Basically, you have the same principles as being an Uber or other ridesharing driver in place.  We need to understand what you are using the vehicle for and where you are in that process to determine how your insurance coverage might respond.

When you work with one of these companies, there are four different situations that your vehicle can be in:

  1. You are driving it as a private passenger auto like you normally would
  2. You have your app on “waiting” for a delivery request
  3. You are engaged and on the way to pick up the food to deliver
  4. You have the food and are taking it to the person who ordered

Since we have covered the stages in a different blog, I have provided a link to explain how they all lay together if you would like to review.

In the case of food delivery, numbers three and four are treated the same, unlike an actual Uber or Lyft with people. You are engaged in the business of delivering once you engage the app and head over to pick up your delivery.

The question becomes: does the delivery company provide any coverage, and where does your personal auto policy fit in?

In some ways, this is even more convoluted than ridesharing.  The reason is that the delivery companies are all over the board on coverage.  Some have limited liability coverage while others have nothing at all.  Some look at it like a livery (taxi) service while others see it specifically as food delivery.

As far as your personal insurance goes, the most common situation in a policy is that it excludes food delivery.  There are a few exceptions, so before engaging in any type of delivery, make sure you know your specific situation by consulting the actual policy or calling your agent.  Coverage can vary significantly from carrier to carrier.

The final piece is to note that some carriers offer a TNC (Transportation Network Company) endorsement.  As you may recall, most carriers do not offer coverage to those working for Uber or Lyft, so this makes it possible.  If you read the endorsement, it usually provides coverage for piece #2 above: you have your app on and are looking for a ride/delivery, but you are not directly on the way to or from a delivery.

The bottom line? Make sure to do your homework before taking on the exposure of food delivery.  It may not be worth the extra money.  Contact your agent with any questions that arise.

As always, thanks for allowing us to protect your families.

Sincerely,
Jon

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