Does Regular Business Insurance Cover Food Delivery? We Explain Hire and Reward Insurance
Have you heard of hire and reward insurance? As a business, insurance gives you the knowledge that you are protected if something was to go wrong. You can choose many different types of insurance, and a lot of time and research should be dedicated to finding the perfect one for your business type and needs.
However, if your business experiences losses in terms of food delivery, it is imperative that you find an insurance policy that helps you tackle this drawback.
What is Business Insurance?
To operate a business, many countries require by law that you have comprehensive business insurance. For example, a common type of insurance which businesses with employees take on is workers compensation insurance. This is required when an everyday business endeavour creates an issue where a worker requires reparations. Having insurance means that your business is protected from this unpredictable fiscal obligation.
Therefore, business insurance is a form of coverage that acts as a protector for your business from potential financial losses you may experience when an unpredictable event occurs during the m=normal processes of operation. There are many different types of such insurance, e.g. property damage, legal liability and food delivery.
Does my current business insurance cover food delivery?
Whether your business is just beginning or already has an insurance policy, checking potential and current providers for the magnitude of protection is vital.
Commonly, standard business insurance will cover travel in the form of trips to and from work. That being said, it is unlikely that a general business insurance policy will protect the goods you will be transporting as a food delivery driver. Business insurance that covers commercial travelling (Class 3) will not be extended to protect you in this case.
What cover do I need to receive protection for food delivery?
There are two covers your policy should have to protect against losses in food delivery and generally as an employee. These are:
- Domestic & Pleasure (SD&P) – covers the personal use of a vehicle
- Hire & Reward (H&R) – protection when carrying food or other deliveries in exchange for payment
Most insurance companies will offer you a combined form of insurance that contains both SD&P and H&R protection. Another thing to remember is to check whether your insurance covers all types of modes of transport, e.g. cars, scooters, vans etc. and not just a single type of vehicle.
Simply put, Hire & Reward insurance is the correct terminology for food delivery insurance.
Is Hire and Reward insurance worth the money?
In short, the answer is yes. Especially if it is a large part of your business, it will be more expensive than your traditional business insurance, but this is an acceptable factor in light of the magnitude of protection you will receive.
Many issues could arise when food delivery is involved, and the monetary requirement to cover all these can quickly take on an upwards trajectory. This could even force you into bankruptcy. Insurance is a protective measure you cannot overlook, and while it may come at a high cost, it provides the peace of mind you need to run your business efficiently.
Food delivery insurance policies will protect you from some issues that may cause problems for your business. These include, but are not limited to:
- The human nature of a driver which results in a mistake
- Unpreventable circumstances on the roads which cause delays, e.g. traffic, accidents, road closures
- Vehicle breakdown
- Theft or loss of property under the care of the courier
How do I know that Hire & Reward Insurance is for me?
If your business carries other people’s goods from point A to point B in return for a fee, you most probably legally require Hire & Reward insurance. If there are couriers and drivers on your payroll, this is also a good indicator. This is because this party, aka the driver or courier, is carrying, never belong to them.
Your business is still responsible for the goods until they reach their destination, and therefore, any property damage is your liability, not the drivers or couriers. Hire & Reward is the insurance that takes care of these issues, and you should not discredit its requirement.
Other useful links from about business insurance:
Insurance for Sole Traders
What is Shop Insurance?
Professional Indemnity Insurance
Remember to Compare Your Business Costs is here to help your business every step of the way from business advice, or saving you time and money on your business purchases such as: