HALIFAX, Nova Scotia -- Pizza delivery drivers and couriers here are forced to pay $5,000 to $8,000 (U.S. $3,590 to $5,740) a year or lie to their insurance companies about their line of work.
According to the Halifax Herald, Terry Nichols, district manager for Dynamex Couriers, said running a business above board means drivers have to pay high-risk insurance rates.
"For someone coming into the industry, we're hearing they're being quoted rates of $8,000 (U.S. $5,740) a year for courier insurance," Nichols said.
Dynamex relies on a team of 60 independent drivers in Halifax Regional Municipality. Because of the visibility of the fleet, Nichols said Dynamex insists that its drivers be fully insured.
The same isn't always happening in pizza delivery, however, the report stated. The owner of one Halifax pizza outlet, who didn't want to be identified, said it's common in the industry for young employees to drive with without necessary level of insurance.
"If they had to get specific delivery insurance, because of their age, a lot of them would end up paying $5,000 (U.S. $3,590) a year," he said. "Most of them just can't afford it. We'd be out of business because we just wouldn't have any drivers."
As a business owner, he buys "non-owned automobile insurance" to protect himself should any of his drivers be in an accident.
Though the pizzeria owner said none of his employees has had a serious accident in 12 or 13 years, he said he makes every effort to enforce safe driving practices since his business would likely be targeted in the event of a lawsuit.
Bob Wrye, marketing manager of Portage Mutual Insurance Co. admitted customers don't always tell insurance carriers the truth about their lines of work.
"People do mislead us," he said.
He said the standard form used by insurance brokers asks whether a vehicle is used for "transportation of goods for compensation or hire." Applicants must also sign a statement that they have answered truthfully. A misleading answer will void the policy.
In both Canada and the U.S. many insurance companies won't insure delivery drivers. In Canada, drivers must turn to the Facility Association, a government agency for those who can't find insurance elsewhere. Facility's rates are set higher to avoid competition with mainstream companies.
The Herald contacted several major companies to find out if any offer insurance to delivery drivers, but most declined to answer.
A spokesman for Royal and SunAlliance said the firm will not insure couriers, shuttle services, taxis or pizza delivery drivers.
Portage Mutual Wrye confirmed it's "very difficult" to get insurance for commercial uses right now.
During a January hearing of the Nova Scotia Utility and Review Board (NSURB), it was reported that about 60 percent of drivers insured in Facility weren't there because of accidents or convictions, but because of their high-risk status as taxi or delivery drivers, young or inexperienced drivers, or because of the condition of their vehicles or payment history.
During the NSURB hearing, the board approved an average increase of 47.8 percent for commercial rate levels.