* This is an excerpt from the special report, Protecting Delivery: Insurance for Restaurants that Deliver.
Auto policies are designed and priced for people who do not use their cars for business purposes. Commuting to work is expected, as is driving for personal use. Occasionally running an errand for work is also acceptable. However, most policies do not cover any sort of delivery of goods or transport of people for a fee.
If a restaurant offers delivery, it's important for the operator to look at adding delivery insurance, typically known as excess non-owned auto insurance. Even if a delivery driver has auto insurance, restaurant owners can be held responsible for accidents that happen to drivers while delivering their product.
When considering a non-owned auto policy, restaurant operators should look for coverage with proper limits.
In the event of an auto accident where a driver is at fault, business owners who employ delivery drivers must prove that they took every precaution to protect the public. The owner must obtain a copy of the employee's motor vehicle report (MVR) at the time of hire and again on a regular basis to make sure that the MVR does not show any new violations. If operators can't prove that they ordered those MVRs, they can be found liable and forced to pay punitive damages.
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Most non-owned auto policies specify standards related to the number of moving violations and at-fault accidents a driver is allowed to have and still be eligible for coverage.
The business owner must always inspect the vehicle to make sure it is safe: the horn is working, the mirrors are in place and the brakes and windshield wipers work well. The vehicle should be in good working order so that disrepair does not cause an accident.
The business owner or manager must never require a delivery driver to rush or hurry on a delivery.
And operators should hold regular safety classes for drivers. Some non-owned auto policies outline training programs that must take place in order to maintain coverage.
Affording coverage
Operators can take a number of steps to help reduce the cost of non-owned auto coverage.
The business should have strict safety guidelines in place for all drivers and make sure to communicate them clearly.
Purchasing autos for delivery drivers to use generally doesn't help reduce the cost of coverage and may actually end up being more expensive in the long run. It has been proven that if a driver uses his own vehicle for delivery he is more prudent in his driving.
It gives him a financial reason to be safe. If the business purchases the auto to save money on non-owned auto insurance, the driver has no incentive to drive prudently.
And operators should be as selective as possible when it comes to hiring.
Fort Lauderdale, Fla.-based pizzeria chain Pizza Fusion, for example, hires older, more mature workers whenever possible. The company has 75 franchise restaurants and employs 75 to 100 drivers company-wide.
"We actually have quite a few older drivers, because they have great daytime availability," said Ashley Rathgeber, procurement and research and development manager for Pizza Fusion. "They also usually have good driving records, which helps with lowering our insurance costs."
