Food Delivery insurance – what kind and at what cost

Whenever you budget the expenses of your business, Food Delivery insurance must be near the top of the list because you can’t always know exactly what could happen in the future.

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With the protection provided by general insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your Food Delivery enterprise, you must consider how much financial risk you are taking on.

If your Food Delivery business runs without proper insurance, you are taking a giant chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

Food Delivery Insurance

In this article, we are giving very general guidelines for small businesses to highlight what the main kinds of insurance that you need are, and where we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Food Delivery business?

What this means, for any Food Delivery business owner, is that if some customer claims that your actions caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Food Delivery business is not sheltered by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have claimed.

When you are running your Food Delivery operations, you can’t avoid responsibility for the consequences of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as a limited liability company, all of that liability belongs to you as an individual.

What does Food Delivery insurance protect you from?

For your Food Delivery business, the most important kinds of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any Food Delivery business owner should consider when negotiating the insurance needed.

The main categories of insurance for your Food Delivery businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Food Delivery business is dealing directly with customers, and that means you always have the danger that some accident can happen to them personally or else something of theirs can be damaged.

In such a case, they can demand compensation.

General liability insurance policy for your Food Delivery business insures you against claims coming from injury to visitors or damage to their property.

It protects your Food Delivery business from the claims themselves and also to any follow-on court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The normal level of general liability insurance for your Food Delivery business would be with a cap of $1 million for a single claim and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Food Delivery insurance operations.

Professional liability insurance for your Food Delivery business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Food Delivery business for them, you can quickly have to fight a monetary claim.

Even if the matter against you is ruled in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Every small Food Delivery business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of Food Delivery insurance section below for average prices of professional liability insurance for your Food Delivery operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that the results didn’t meet your description of function, or that your guidance was basically incorrect.

You need to know the explicit laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held liable for injuries caused by products claimed to be defective.

To cover yourself against any possible lawsuit, you need Product liability insurance for Food Delivery

Only you can know exactly how much insurance you must have.

Best advice is to talk to experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your Food Delivery business

Beware! – practically all policies for private vehicle insurance do not cover any happening like theft or accidental damage when the vehicle is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a proper commercial vehicle insurance package.

Commercial van policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is insured if your van is involved in a crash.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The necessary value of the insurance depends on the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your Food Delivery business needs specialized and costly equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy whatever needed to keep your Food Delivery business running.

It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Food Delivery business’ equipment.

Commercial Property insurance

Any Food Delivery business that owns or rents space in a building needs a commercial property insurance policy.

If you own the building, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Every physical building location should carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Food Delivery business deals in areas of high risk, like Texas or North Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where extreme cold snaps can cause damage to outer coverings of Food Delivery business premises, there is a need for more supplementary cover than in warmer climes.

Although the level of cover depends entirely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Food Delivery insurance section below to give some indication of the average prices per million dollars of property insurance for your Food Delivery business.

Temporary insurance by month, week or day for your Food Delivery business

Is your Food Delivery business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Food Delivery – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having reduced premiums but still having identical risk cover.

The important feature of short-term insurance is that you buy the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Food Delivery business

You have the chance to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP merges commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized Food Delivery businesses, such as yours.

There are a few limits that will dictate whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle risks.

Also, the size of your business will determine whether you are permitted to take out BOP cover.

The normal business that is eligible for a BOP policy must have fewer than one hundred employees, and under five million dollars in annual revenue.

Plus, you must separately take out the required worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Food Delivery business employees

In many states, it is mandatory to have workers compensation insurance when your Food Delivery business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you can’t get your workers compensation obligations from private insurance providers.

Workers compensation charges are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every Food Delivery insurance need is unique, there are enough examples of average quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your Food Delivery businesses needs.

Types of insurance Price range
Equipment insurance $382 – $1433
Public liability insurance $304 – $635
Commercial vehicle insurance $1647 – $2538
Product liability insurance $307 – $659
General liability insurance $629 – $842
Commercial insurance $834 – $2883

Cost of insurance for your Food Delivery operations depends on many different factors.

We have calculated these figures for small independent Food Delivery businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, while in smaller states like New Mexico, they usually are about 20%-30% less.

The location and size and type of your Food Delivery business can have a big effect on the cost of different policies.

You should talk to professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Food Delivery operations?

This is a general term used to describe standard insurance policies designed to protect Food Delivery business owners from risks like bodily injury, property damage, claims of negligence.

Does my Food Delivery business have to have insurance?

Some of the forms of insurance are not mandatory for you to run your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Food Delivery business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Food Delivery insurance.

How much will Food Delivery business insurance cost?

On top of the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

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