Considerations When Starting a Restaurant Delivery Service
During the COVID-19 outbreak, more and more restaurants are offering delivery services to their customers. While this brings convenience to customers and helps restaurants, it also opens up new insurance considerations and risks.
When making deliveries, employees could slip, trip and fall going to a customer’s door; become the victim of a crime (e.g., robberies); or injure themselves or others in an auto accident. If your restaurant is starting a delivery service, it’s critical to keep these risks in mind and take the proper steps to safeguard your employees and prevent potential claims.
Keeping Your Delivery Drivers Safe
While delivery services tend to differ slightly from business to business, there are a number of general considerations to keep in mind when it comes to protecting workers:
- Offer training to employees to help them identify hazards and strategies they can use to stay safe when making deliveries. This could include defensive driving courses and education on how to respond in robbery situations. Above all, it’s important to reinforce good driving behaviors by reminding drivers to:
- Wear their seat belts at all times.
- Never use cellphones when making a delivery, unless they pull off the road and park the vehicle.
- Avoid allowing others to ride in the vehicle with them when making deliveries.
- Obey all traffic laws.
- Sign a safe driving policy.
- Review the motor vehicle records of any employee who operates a company-owned or personal vehicle for business purposes. Delivery drivers must be qualified, have a valid driver’s license and have an acceptable driving record.
- Spread deliveries out across multiple drivers. This can help you avoid overwhelming your employees, which in turn discourages them from speeding or driving recklessly to make up for lost time. For added safety, refrain from making guaranteed delivery times. Rushing deliveries can increase the likelihood of an accident.
- Screen deliveries using caller ID. Not only does this help you trace the location of the customer, but it can also help you maintain delivery records. At a minimum, you should retain a list of all customers, their telephone numbers and orders.
- Take payments through an online ordering system or over the phone.
- Leverage technology, like in-car surveillance cameras and GPS systems, to monitor drivers and locate them quickly in the event of an incident. Drivers should also have cellphones they can use to contact your restaurant or alert the authorities in emergency situations.
- Refrain from making late-night deliveries, as your employees may be especially vulnerable to crime during this time.
Insurance Considerations for Restaurants Offering Delivery
Even if delivery drivers have their own auto insurance, restaurant owners can be held liable for accidents that occur while the drivers are working.
If your business has employees making deliveries, you should consider adding hired and non-owned automobile coverage to your insurance policies.
What is hired and non-owned auto insurance?
Hired and non-owned auto (HNOA) insurance covers liability expenses related to accidents involving vehicles that your restaurant uses for work purposes but doesn’t own. This includes vehicles that your business rents, as well as your employees’ personal vehicles that are used for deliveries.
Under HNOA insurance, the business is the named insured. This coverage is typically added to your business automobile policy; however, it can be added to your business owner’s policy or other restaurant insurance packages. An HNOA policy typically covers liability claims and defense costs. It can cover attorney fees, settlements or judgments, and other court costs if a restaurant is sued as a result of the accident. What’s more, these policies can cover the actions of both full-time and part-time employees.
Typically, an employee’s personal automobile insurance will provide primary insurance for accidents if the employee is using their own vehicle for a delivery. The personal auto insurance policy will cover damage to the employee-owned vehicle, but it will not protect the business if the claimant sues. This is where the HNOA policy comes into play.
Because each restaurant faces a unique set of risks, it is important to team up with an experienced insurance agent who understands your business and can knowledgeably review your situation to design coverage tailored to your exact needs.
Contact us today to learn how we can help you protect your business.
This content is strictly informational and should not be used as specific advice on insurance products, legal, accounting, and/or tax related matters. Insureds should always contact the appropriate licensed professional for their insurance, legal, accounting, or tax needs.