By Cheryl Downey
Senior VP, EPIC Insurance Brokers
Incorporating delivery into your operations can be a major boon to the bottom line. It can also cause logistical headaches for operators when it comes to insurance coverage. Below are five things a pizza operator needs to know before purchasing any type of insurance.
1. If a pizza operator offers delivery service with employee-owned automobiles, that operator should know and understand what non-owned auto insurance covers and the challenges it can create for the business. That includes:
- Non Owned Auto Delivery insures bodily injury and property damage liability caused by autos not owned by your corporation, partnership or LLC when used in your business.
- Non Owned Auto insurance does not cover a sole proprietor’s owned auto (a sole proprietor’s vehicle should be insured as an “owned auto”).
- A driver’s insurance policy is the “primary” auto liability coverage. Non Owned Auto liability is “excess” of the driver’s liability limits.
- Non Owned Auto Delivery does not cover damage to the employee’s vehicle.
2. Hire mature drivers with excellent driving records and insurance. Drivers must be 18 to drive on your behalf by Federal Law. Delivery adds a higher element of risk to your business. Very few insurance companies will insure Non Owned Auto Delivery or Work Comp for delivery restaurants because of the increased risk that comes with young drivers.
3. Determine the “Replacement Cost” of all of your property, including furniture, fixtures, goods, small wares, equipment, leasehold improvements, etc. Property values should be sufficient to rebuild your restaurant considering today’s labor rates and cost of new equipment and materials.
4. In any property loss, such as a fire, windstorm, burglary, etc. your insurance company will determine your loss based on your contractual requirements in your lease and your insurance coverage, limits and exclusions. Consider providing a copy of your lease to your insurance broker.
5. Know the exclusions in your policy and determine if you need to consider additional insurance. Most policies exclude:
- Employment Practices Liability
- Cyber/network security
- Errors & omissions
- Wear & Tear
Cheryl Downey and her team at EPIC Insurance Brokers, in San Ramon, Calif., have more than 30 years of experience providing safety and risk management services to the pizza delivery industry.
Photo provided by Pixabay.