Restaurant Delivery Insurance – Cost and Coverage

Whenever you budget the expenses of your business, restaurant delivery insurance must be high on the list because you can’t always know exactly what could happen in the future.

Need General Liability Insurance for Your Restaurant Delivery Business?
Get Your Free Quote

With the protection provided by liability insurance and all the other kinds 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 restaurant delivery enterprise, you must consider how much financial danger you are taking on.

Business Insurance for restaurant delivery

If your restaurant delivery business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a total wipe-out.

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

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

The question is, can you afford to NOT have insurance for your restaurant delivery business?

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

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

In some states, like Montana, 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 privilege of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have claimed.

When you are running your restaurant delivery operations, you can’t deny responsibility for the consequences of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as an LLC, all of that liability belongs to you as an individual.

What does restaurant delivery insurance protect you from?

For your restaurant delivery business, the most important sorts of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

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

In the next few paragraphs, we will outline the most important points any restaurant delivery business owner should remember when negotiating the insurance needed.

The main types of insurance for your restaurant delivery businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any restaurant delivery business is dealing directly with customers, and that means you usually have the danger that some accident can happen to them personally or else something of theirs can be spoiled.

In such a case, they can require compensation.

General liability insurance policy for your restaurant delivery business insures you against claims coming from injury to customers or damage to their property.

It protects your restaurant delivery business from the claims themselves and in addition to any follow-on court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The average level of general liability insurance for your restaurant delivery business would be with a upper limit of $1 million for a single submission 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 restaurant delivery insurance operations.

Professional liability insurance for your restaurant delivery business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your restaurant delivery business for them, you can quickly face a law suit.

Even if the lawsuit against you is decided in your favor, the cost of defense can be high, and the impact on your reputation can be damaging.

Almost all small restaurant delivery business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

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

Product liability insurance

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

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

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

To cover yourself against any possible lawsuit, you need Product liability insurance for restaurant delivery

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

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

Commercial insurance

Commercial vehicle insurance for your restaurant delivery business

Be careful! – 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 best 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 truck policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is insured if your van is involved in an accident.

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

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

Tools and Equipment insurance

Since your restaurant delivery business needs specialized and dedicated equipment, you will realize 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 unforeseen acts.

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

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy everything needed to keep your restaurant delivery business running.

It is hard to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your restaurant delivery business’ equipment.

Commercial Property insurance

Any restaurant delivery business that owns or rents space in a building must have a commercial property insurance policy.

If you own the property, you certainly have a substantial capital investment, as well as 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 man-made damages like theft and vandalism.

If your restaurant delivery business operates in areas of high risk, like Florida or North Carolina, supplementary 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 restaurant delivery business premises, there is a need for more additional cover than in warmer climes.

Although the level of cover depends mainly 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 restaurant delivery insurance section below to give some indication of the average prices per million dollars of property insurance for your restaurant delivery business.

Temporary insurance by month, week or day for your restaurant delivery business

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

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

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

The essential feature of short-term insurance is that you purchase the cover for a defined period – a specific 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 higher business activity, get the existing cover improved.

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

Business Owners Policy BOP for your restaurant 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 shield you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized restaurant delivery businesses, such as yours.

There are two limits that will rule whether BOP is suitable for your own business.

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

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

The normal business that is allowed to take a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual revenue.

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

Workers Compensation insurance for your restaurant delivery business employees

In most states, it is mandatory to have workers compensation insurance when your restaurant delivery business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if an employee 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 having to pay penalties levied by the states.

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

In these states, you may not obtain your workers compensation obligations from private insurance companies.

Workers compensation charges are worked out 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 restaurant delivery insurance requirement is unique, there are enough examples of standard quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

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

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

Types of insurance Price range
General liability insurance $590 – $1190
Equipment insurance $445 – $1045
Commercial insurance $835 – $2220
Commercial vehicle insurance $1900 – $3010
Product liability insurance $335 – $695
Public liability insurance $395 – $760

Cost of insurance for your restaurant delivery operations depends on many different factors.

We have estimated these figures for small freelance restaurant delivery businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, while in smaller states like Utah, they can be about 20%-30% lower.

The location and size and type of your restaurant 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.

Also you can let the internet do the work for you by searching for insurance companies near where your business is located.

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

FAQ

What is small business insurance for restaurant delivery operations?

This is a wide term used to describe common insurance policies designed to protect restaurant delivery business owners from risks like bodily injury, property damage, claims of negligence.

Does my restaurant 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.

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

What does a small restaurant delivery business insurance policy cover?

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

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the best policies for restaurant delivery insurance.

How much will restaurant delivery business insurance cost?

In addition to the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

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

You can search for more information insurance for restaurant delivery , in the search box below, and follow the relevant links.

Was this helpful? Share it!
SBCoverage.com
Enable registration in settings - general