3 Things You Need to Know About Deliveries and Business Insurance

Whether you are delivering pizzas or penguins, it is important to make sure you have adequate insurance coverage. Here are three facts you need to know about deliveries and insurance.

#1: Your Personal Auto Insurance Policy May Not Cover Damage to Your Vehicle

One of the biggest misconceptions among delivery drivers who use their personal vehicles for work is that their auto insurance policy will cover them if they get into an accident. The truth is that most insurance companies have a special clause within their policy contract that specifically forbids commercial use—including deliveries—and nullifies coverage if the vehicle is used in such a manner. What this boils down to is that if you are in an accident while using your personal car for delivering goods, the damage to your vehicle may not be covered by your personal policy.

#2: You May Be Responsible for Damage to Goods and Passenger Injuries

Another important fact to consider when you use your personal vehicle for a delivery job is that you may be financially responsible in the event of an incident. This means that if there is any damage to the goods you are transporting or another person's property, it might be up to you to replace or repair the items out of your own pocket. Furthermore, if any passengers in your vehicle or the other car are injured, you could be responsible for their medical bills. This is largely due to the fact that if your personal auto insurance policy is null and void during an accident due to commercial use, so is your liability coverage.

#3: A Special Type of Coverage is Available

The good news for those who work as delivery drivers is that there is specialty coverage available. However, the policy type needed will depend on who owns the vehicle—either the delivery driver or the employer.

Most companies that require employee drivers to use their private vehicle in the course of business can purchase non-owned vehicle liability insurance. This is a special type of policy that specifically covers delivery drivers while they are using their personal vehicles for business. It works as a special addition to any personal auto policy the vehicle owner (usually the delivery driver) has and becomes primary in the event of an accident.

If you are the company owner and you are making deliveries personally, you will need another type of policy called a commercial auto insurance policy. This is very similar to a personal auto policy, but it is taken out by the business instead of the delivery driver. The employee—or you if you're both the owner and the delivery person—is then added as a named driver on the policy.

It is also important to note that standard liability business insurance taken out by a company does not include auto use. Thus, it is important to carry one of the two abovementioned policy types if a business engages in any sort of delivery process.