Insurance for On-Demand Food Delivery Companies

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Overview

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.

Accidents Each Year

5.3

m

A vehicle accident happens every 60 seconds in the US, and many of those involve food delivery drivers. On-Demand Companies must navigate a dangerous environment to find success.

States Requiring Financial Responsibility

100

%

Although not all 50 US states require auto insurance to legally operate a vehicle on the road, every single one demands drivers to have financial responsibility.

Pedestrian Deaths Increased

21

%

With fewer cars on the road during the pandemic, pedestrians were less cautious and cars drove faster. As a result, more pedestrian injuries and deaths occurred in 2020 than the previous year. Unfortunately, many delivery drivers were involved in these fatal accidents.

Restaurants Increased Profits

65

%

With the massive uptick in on-demand delivery food services, restaurants said they could increase their profits merely by offering this option. Although the global pandemic spurred this trend forward, society was already catching on quickly pre-pandemic.

Why Is Insurance for On-Demand Food Organizations Important?

No matter the mode of transportation — scooter, bike, car, etc. — On-Demand Companies must have insurance to maintain momentum. Here are a handful of reasons why coverage is vital for this 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.

On-Demand Insurance Frequently Asked Questions

If a customer receives spoiled food, the responsibility typically falls on one of the following: the restaurant or the delivery driver. Either the restaurant failed to prepare the food properly or the delivery driver didn’t follow food safety procedures. Sometimes, the customer is to blame because they didn’t eat the food right away.

The cost of insurance for on-demand companies will depend on several things, including the company’s size and development stage. Other factors include:

  • Exposures: risks being insured
  • Company practices: views on safety, compliance, and risk management
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Claims history: the type and amount of past claims against the company

Types of On-Demand Food Delivery Companies that need insurance

  • Online meal kit services
  • Local grocer
  • Fast food delivery
  • Small business franchise
  • Local retailers
  • Butchers or meat markets

How it works

Finding insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined & intuitive as possible.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the 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.

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 of your industry, proactively ensuring you’re covered.

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 of your industry, proactively ensuring you’re covered.

John Olson, Assistant Vice President, Customer Success

Meet your specialist

Prior to joining Founder Shield in 2018, John worked as a Broker in the Reinsurance space, facilitating global coverage for multinational insurance carriers.  Since then, John has helped to build out and maintain the insurance programs for some of Founder Shield’s largest clients in the Auto and Gig Economy space, while recently taking on a larger role for our FinTech practice. Working on our Customer Success team, he works directly with insureds on facilitating and streamlining robust programs for our clients through a collaborative approach.

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