The on-demand food delivery market is growing at an incredible pace, driven by innovative apps and a high demand for convenience. But with that growth comes unique risks.
What happens if a delivery driver gets into an accident? What if there’s a food safety issue or a customer claims a mistake? These are the kinds of risks that can slow down your business and even stop it in its tracks.
We offer specialized insurance for on-demand food delivery companies. Our coverage is designed to protect your business from common risks like delivery driver accidents, food liability, and professional errors, so you can focus on scaling your business with confidence.
Food delivery has transformed into one of the most competitive industries, with start-ups, restaurants, and grocers all vying for a piece of the pie. In under five years, the percentage of online food delivery orders has doubled (Gloria Food). Those who succeed in the space must solve the complex challenge of insuring themselves when delivering food to a demanding customer base. Part of the task is speed: 44% of people are likely to order food for delivery more often if restaurants could offer them faster delivery times (Gloria Food).
The blueprint for success in food delivery involves deciding whether to own or outsource the fleet of delivery vehicles and which mode of transport to use (i.e. car, bike, scooter). Other considerations include tracking deliveries and screening the food couriers. Underwriters use this critical information to develop a scalable insurance policy.
Why is Insurance for On-Demand Food Delivery Companies Important?
On-Demand Food Delivery companies can use insurance to protect themselves from various risks, streamline their operations, and build credibility within the industry.
Bodily Injuries
Pedestrians and drivers run the risk of becoming injured every day. On-demand food delivery drivers try to get to their customers quickly and pedestrians don’t always follow rules or best practices. Unfortunately, these behaviors often lead to accidents and costly medical bills. It’s best to know your risks and prepare for a worst case scenario.
Property Damage
Besides bodily injury, On-Demand Companies must also face the risk of damaging someone else’s property. A driver might hit a mailbox, leave marks on a driveway, or a myriad of other things during a delivery. Bumps, dings, and scratches happen, but they don’t have to carve away at the balance sheet.
Noncompliance Penalties
Much like personal auto insurance, On-Demand Companies must comply with local, state, and federal laws regarding legal compliance. Having an active auto insurance policy is a must; however, that’s just for starters. Most work-related accidents aren’t covered by a personal auto policy, so it’s vital knowing where one stops and the other begins to avoid fees, fines, and penalties.
Food-Related Illnesses
While the global pandemic undeniably propelled On-Demand Companies forward, it didn’t do much to curb anyone’s appetite. People still crave sushi, meatball subs, and plenty of other yummy dishes. However, working with food always opens the door to food-borne illness, such as food poisoning. Although unintended, food-related illnesses could make customers sick, making it a risk On-Demand Companies must navigate.
The potential of a customer being injured while operating a scooter or bike is the biggest risk facing the micromobility space. In addition to the need to insure yourself against this risk, it’s crucial to know that this coverage will be required in at least $1M per occurrence and $2M in the aggregate in every city you wish to operate. Most cities will actually require more.
When employees sustain work-related injuries, employers are typically responsible for their medical costs and lost wages. This policy covers these expenses, protecting employees while keeping companies running smoothly.
Cyber insurance protects companies from third-party lawsuits relating to electric activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.
Delivery drivers and couriers often use their vehicles to drop products off to customers. This coverage protects against damages sustained by employees when they use personal vehicles for business purposes.
Professional liability, also known as errors and omission (E&O) insurance, covers companies in third-party or client lawsuits claiming substandard work or service. Work errors or oversights, missed deadlines, budget overruns, etc., often result in costly cases — but E&O insurance responds to these mishaps.
The cost of insurance for your on-demand food delivery business isn’t one-size-fits-all. It’s a highly variable number based on several key factors unique to your company.
Here’s what an insurer will consider when determining your premium:
Your Business’s Size and Scope: The number of drivers you have, your total revenue, and how many deliveries you complete on a daily basis all play a major role. A larger operation with more deliveries naturally has a different risk profile than a smaller startup.
Safety and Risk Management: Insurers look at the safety measures you have in place. Do you conduct background checks on drivers? Do you have protocols for handling and transporting food safely? Strong safety measures can often lead to a lower premium.
Policy Structure: The amount of risk your company is willing to take on directly impacts the cost. A higher deductible, for instance, means you’ll pay more out-of-pocket for a claim, which often results in a lower annual premium.
Claims History: Your company’s past will influence its future rates. A history of frequent or costly claims, such as accidents or food liability incidents, will likely result in a higher premium, while a clean record can help keep costs down.
On-Demand Food Delivery Claims & Examples
Navigating a commercial insurance claim is often challenging, often fraught with confusion and multiple unknown factors. The following four-part series outlines the ins and outs of commercial insurance claims:
Proper insurance coverage streamlines operations by providing a clear and efficient process for handling incidents and claims. Instead of a company needing to self-fund or manage the legal and financial fallout from an accident or liability claim, the insurance policy and provider can take on that burden. This allows the business to quickly resolve issues and get back to its core function of delivering food. It also frees up valuable resources that would otherwise be spent on legal fees and settlements, enabling the company to focus on growth and customer experience.
Having comprehensive insurance is a powerful signal of credibility to multiple stakeholders, including restaurant partners, drivers, and customers. It demonstrates that the company is professionally managed and takes its responsibilities seriously. Restaurant partners are more likely to collaborate with a delivery service that can prove it has coverage for potential liabilities, protecting their own business. For drivers, it provides a sense of security that they are part of a legitimate and well-protected operation. Ultimately, this enhanced trust makes the company a more attractive and reliable partner for everyone involved.
Yes, insurance is often a requirement for regulatory compliance in the on-demand and gig economy. Many local, state, and national laws mandate certain types of insurance coverage for companies operating in the transportation and food service sectors. Without the proper policies, a food delivery company may face fines, legal challenges, or even be forced to cease operations. Therefore, securing the right insurance is not just a matter of risk management but a fundamental step toward legal operation and long-term viability.
On-Demand Food Delivery Insurance Insights
ARTICLES
Top 5 Risks Consulting Firms Face
No matter if your business relies on a few chosen professionals or several thousand, all consulting firms face unique risks. Helping companies thrive and improve...
Meet Priori Legal: Connecting Startups to Trusted Lawyers
We’re all about teaming up with great startups on a mission to help the startup community excel. Priori Legal is one of those awesome companies. This guest post...
Finding on-demand food delivery insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined and intuitive as possible.
1
Get a quote
Use our custom-built digital platform to get quotes fast. We automate clerical tasks that plague traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.
2
Pair with a specialist
No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.
3
Stay one step ahead
To do better, you need to know better. With changing political, technological, legal, and economic landscapes, staying ahead of the curve is critical.
Our in-house team is tapped into the latest developments in your industry, proactively ensuring you’re covered.
Schedule Time with an On-Demand Food Delivery Expert
Risk Calibration
Let’s figure out if you’re under- or over-insured and whether your current policies have detrimental gaps.
Identify Cost Savings
We’ll compare your current policies with our extensive benchmarking database to see if your risk and costs have kept pace.
Risk Calibration
Walk away with a detailed plan to manage risk as your company scales — no strings attached.
Why Choose Founder Shield?
Founder Shield is a leading insurance provider that specializes in offering comprehensive coverage for high-growth companies, offering numerous benefits and advantages over traditional insurance providers. Here’s a breakdown of some of the key features and benefits that you’ll enjoy with us:
Benefits of Choosing Founder Shield
Industry Expertise
Founder Shield is focused on protecting rapidly evolving on-demand startups. We ensure that our products are tailored to meet the unique needs of on-demand companies.
Customized Solutions
Founder Shield offers bespoke insurance policies that are designed specifically for each client’s needs, ensuring comprehensive coverage that addresses the unique risks associated with on-demand operations.
Fast Quotes
With Founder Shield’s streamlined quoting process, you can receive a personalized quote for your on-demand insurance quickly, allowing you to make informed decisions fast.
Ease of Use
Founder Shield’s user-friendly digital platform makes it easy to manage your insurance policies, submit claims, and access important documents whenever you need them.
Dedicated Support
Founder Shield provides exceptional customer service, with dedicated account managers who are always available to assist you with any questions or concerns you may have about your insurance coverage.
Scalable Coverage
As your business grows, Founder Shield’s insurance policies can grow with you, ensuring you always have the right level of coverage for your changing needs.
Founder Shield is a preferred choice for on-demand food delivery businesses because of our specialization in the industry. We offer flexible and customized insurance policies, a speedy quoting process, and exceptional customer service with dedicated account managers.
Great service – proactive, responsive, go beyond what I have expected from previous providers. The team do a wonderful job
Blockchain
Cannabis
Cryptocurrency
Influencers
Micromobility
On-Demand & Shared Economy
On-Demand Delivery
Robotics
SPACs
Web3
AI
E-Commerce
Education Technology
Esports
Fintech
MSPs
SaaS
Startups
Technology
Life Science Risk Management
Biotech
Dietary Supplement & Nutraceutical
FamTech & BabyTech
HealthTech
Pharmaceutical
Virtual Care, TeleHealth, & Telemedicine
Financial Services
Professional Services
Media & Advertising
info@foundershield.com 
28 Liberty Street, New York, NY 10005 
646.854.1058 
Amit Patel
