Food delivery services are a great way to make money. And more Canadians are driving for delivery companies like DoorDash and UberEATS. But, with freelance delivery jobs come a host of questions about the type of insurance drivers need to deliver food.
The Surge in Freelance Food Deliveries
Food delivery companies are gaining popularity. People want fast food and groceries delivered to homes, schools and offices. And, for freelance drivers, it’s a great way to make money. Retirees, students and anyone with a flexible schedule can work for a food delivery service. The hours are flexible, and the pay and scheduling are usually convenient.
Rideshare businesses like Uber and Lyft have rideshare insurance policies that cover drivers. However, the same isn’t true when delivering food. Drivers may need to supply their own vehicles in most cases unless a car is provided. And, insurance companies don't honour personal policies if a driver is hit while delivering food.
Stiff Penalties for Under-Insured and Uninsured Drivers
Some companies offer vehicles. But, if they don't, drivers need to get commercial insurance. Driving without insurance will lead to stiff penalties ranging from $5,000 up to $50,000. Drivers making food deliveries without commercial insurance are treated as if they have no insurance. That's even with a personal insurance policy.
Drivers should never drive in a personal vehicle for commercial purposes. If there's an accident, provincial health will cover emergency care. However, rehabilitation and extended care costs are the driver's responsibility. Liability falls on drivers and settlement for fault drivers can exceed $200,000 in some cases.
If a driver uses their personal vehicle for delivery of any kind, the driver should notify their insurance company. The insurance company could cancel the policy if they find out that the use of the vehicle has changed.
Commercial Insurance Policies
In Canada, it’s mandatory to have primary or personal vehicle insurance on vehicles used on public roadways. The Financial Services Commission of Ontario approves operating procedures for auto insurance providers. Therefore, they can elect whether to offer endorsements for personal vehicles.
Drivers need commercial insurance for deliveries. Uber is an example of a company requiring more than a personal auto insurance policy.
Commercial auto insurance includes liability coverage. It's for drivers if they get into an accident with a company vehicle. Property damage can be included to cover damaged property, injuries to the driver or other people and legal and medical expenses. It won't cover drivers using their own vehicles. Businesses will need a rider or add-on.
Commercial Insurance for Delivery Services:
Interested in the types of insurance offered by delivery services?
Insurance for a few delivery services includes:
- Amazon Flex: $1 million in liability coverage. Also included are uninsured/underinsured motorist coverage and comprehensive collision coverage.
- Door Dash: Drivers must have their own insurance. $1 million in liability coverage. No collision coverage.
- PostMates: Vehicle inspections aren't required. $1 million in liability insurance. Only after a personal policy is exhausted.
- UberEATS: Drivers must be over 21 in Canada. A commercial insurance policy is included with up to $1 million per incident.
Commercial Auto Insurance: When a Business Takes Out a Rider or Add-On
With commercial auto insurance, the business might cover the costs for additional insurance for the driver’s vehicle. This add-on is an endorsement or rider.
Note: Insurers in Ontario aren't required by law to provide add-ons.
When a business elects an endorsement or rider, they will consider:
- Driving age, driving record and experience.
- If deliveries will be at night.
- Statistical data like accidents from making deliveries in a hurry. Or, kilometers traveled that can increase accident risks.
Hired & Non-Owned Auto Insurance Policies
Hired & non-owned auto insurance is coverage for drivers using their own vehicles or a company vehicle.
- These policies cover damage to vehicles not owned by the driver.
- Coverage can include rentals, leased vehicles, and company-owned cars and trucks.
- If drivers use their own vehicles, insurance can cover them for deliveries.
Help for Drivers that Need Insurance Coverage
Drivers should confirm the insurance the food delivery service provides. If drivers use their own vehicles, they should only drive with commercial auto insurance. For drivers looking for commercial insurance, reach out to Rates.ca. With Rates.ca, drivers can compare rates from over 30 of the best insurance providers in Canada. Compare quotes today!