People enjoy being able to eat food from their favorite restaurants without having to go out. A number of food delivery services are operating across the country.
According to the Second measure, meal delivery services grew by the rate of 24 percent through the end of March 2020.
Like ridesharing companies, businesses in the food delivery sector including Postmates, DoorDash, and Uber Eats have succeeded in attracting drivers to work for them. Through this, companies get benefits like the freedom to decide on the work schedule of the drivers, quick turnaround for payment, and above all, they do not have to deal with riders who get into their personal vehicles.
Owning a car and paying insurance every month does not mean you are eligible to work as a food delivery driver. Your personal insurance is enough to enter the deal to work for the food delivery company as an independent contractor but in the event of an accident, things get complicated. If you get involved in an accident, there is a chance that your personal insurance may not be enough to cover the accident.
If you have to drive for food delivery services, you are required to have a personal auto insurance policy that covers the commercial use of a car regardless of whether you work part-time or full-time. The rates for business use of a car are quite higher than that for personal use because the following factors increase the risk of being on the road.
- Frequency of driving
- Time spent driving
- Locations between which one rides
- Distraction issues
Commercial and business-use policies cover the risks associated with using your personal car for commercial purposes. Food delivery service is still a new business and the insurance industry is still undergoing the process of adapting to the changes. This emphasizes the importance of checking with your current insurance company to know your coverage options if you are thinking of working as an independent contractor for a food delivery service.
Postmates, Uber Eats, and DoorDash are quite famous food delivery services operating in Los Angeles. The coverage these companies offer for damages due to food delivery accidents may vary from one another.
According to a report by Second Measure, 58% of DoorDash customers were using the service exclusively in the first quarter of 2020. This was one of the highest percentages of exclusive customers in the food delivery business.
DoorDash requires their driver to have their own insurance in types and amounts required by law. The policies required include auto insurance policy but that isn’t the only one required. If the drivers fail in maintaining their insurance, then DoorDash’s insurance may not cover them.
DoorDash drivers are provided with excess auto insurance but it is only offered if any bodily injury or property damage has been caused to third parties. If an accident happens, the driver’s personal auto insurance is used as the primary coverage. In case the delivery driver’s policy is insufficient to cover the damages and the accident took place while the driver was on active delivery, the $1 million contingent liability policy of DoorDash comes into play. Also note that, for the policy to apply, the driver should be in possession of delivery goods, meaning that he/she should be on the way from the restaurant to a delivery spot and should not be on their way for pickup.
From June 2019, all US drivers are eligible for occupational accident insurance coverage at no cost. In case an accident happens, the insurance will cover:
- Medical expenses up to $1000,000 with no co-pay or deductible
- Disability payments up to $500 a week
- Survivor payments up to $150,000 for eligible dependents
Postmates is the top-ranked food delivery service in Los Angeles. Being in high demand means there is even greater responsibility.
Postmates requires its drivers to maintain their personal automobile liability policy on the vehicles they operate while working for the company. The insurance limits have to be equal to or greater than the minimum requirements specified by the laws of the state the independent contractors drive-in.
Like DoorDash, Postmates offers $1 million in excess liability to third party compensation claims. The excess liability policy comes into effect only after the driver’s personal auto insurance coverage exhausts. The company also offers “accidental occupational liability” coverage, an additional coverage that provides up to $50,000 to cover the medical expenses incurred due to injuries while on the job.
According to Drive Girl Drive, highly congested areas like Santa Monica, Hollywood, and Downtown are some of the busiest places for Uber Eats drivers. The time between 5 and 9 pm is often the busiest.
As per the information available in the Uber’s website, the company requires the following from its drivers:
- The drivers must have comprehensive or third party damage cover
- The driver has to be listed as an insured driver on the policy even while they are driving someone else’s car.
- The vehicle model, make type, registration and year have to be clearly mentioned in the insurance policy.
- The expiry date of the insurance policy has to be clearly displayed.
Different from DoorDash, Uber Eats liability to third parties is covered from the point the driver accepts the request until they complete the delivery. In case the app is on but the driver is in between deliveries meaning he/she hasn’t started yet to pick up or deliver food, then the driver will be covered for up to $50,000/$100,000/$25,000(individual/accident/property damage). Uber offers $1 million liability coverage per incident and it is covered by the commercial insurance policy of Uber.
The insurance provided by Uber to its drivers covers them while being on active deliveries. The time the drivers wait for requests while being logged in is covered by their personal insurance.