How Much Does Food Delivery Insurance Cost?

Covid 19 has seen an enormous number of businesses in the food and beverage industry enter into food delivery to continue trading. While lockdown is over for most people, ordering in has become a luxury many people still indulge in regularly.

But for those just starting out, food delivery insurance is a key factor in assessing how profitable this expansion might be. There are plenty of options out there, though. Here are some pointers to help you understand how food delivery service works:

What is food delivery insurance?

Food delivery insurance is insurance cover for the specific purpose of dropping off food at residential or business locations for a profit. 

Who needs food delivery insurance?

It’s important to note that the profit element is vital as only those delivering food for business purposes require this type of insurance.

If you are working as a food delivery driver for a company, it is also worth checking that your employer is covering you with this type of insurance as drivers often find themselves in unusual situations contractually. Whether you are employed or self-employed could make all the difference. 

Uber found itself in the centre of a court scandal over the type of employment their drivers were engaged in, and the consequences for the business were serious^[1]. These details matter in determining who is obligated to insure the delivery vehicle.

Does business insurance cover food delivery?

Business insurance does not tend to cover food delivery. Nevertheless, the first thing any business owner should do in this situation is checking that their current policy doesn’t cover delivery. You may be already covered or your current offer could be expanded to cover you more cheaply.

There is a specific kind of insurance for business based motoring called hire and reward, as opposed to regular motor cover for social, domestic and pleasure purposes. This is the kind of policy required for most commercial transport, which includes the food delivery industry. So, legally you must have this type of commercial car insurance if you will be driving a vehicle for the purposes of delivering food to your customers or else employing someone who will.

How much is food delivery insurance?

The big question businesses ask themselves when looking to expand into the delivery industry is will the expansion be worth it? With so many established competitors, initial response might be slow as you build your reputation and increase delivery sales, and hire and reward insurance is more expensive than many expect. With most businesses delivering at night or during rush hour, travelling large distances over urban areas, the average Hire and Reward policy is as much as four times what your personal cover would be. But don’t panic: there are things you can do to reduce this and other options for when you’re just starting out.

Read more about types of restaurant insurance coverage to help you choose the right one for your food business

The first and most obvious alternative if you’re new to delivery is to use a pre-established delivery service. Deliveroo and Uber Eats have a large customer base for you to tap into and have drivers that save you the necessity of having your own delivery service. You do not need to insure Deliveroo or Uber Eats drivers. If you are after fast food delivery insurance, you can simply take the order and prepare the food; they will do the rest. These companies take a percentage of the sale so you only pay as you profit.

Rather than trying to figure out which food delivery service is the best, Epos Now customers can tap into all of these companies’ resources in one big swoop with the use of the Epos Now Delivery app which connects you with all the biggest food delivery platforms and integrates them smoothly into your EPOS system. 

Epos Now Delivery boosts revenue, leads to fewer errors and saves staff time as delivery notifications go straight through to your till so they can be processed the same way as any other order.

Using these alternatives makes food delivery insurance redundant. However, as your sales grow, you may reach a point where you’re making enough sales to reduce the impact of food delivery insurance on your profits. At this point, it may be cheaper to hire your own driver and take total control over your delivery service.

How to get food delivery insurance?

Getting food delivery insurance is similar to other forms of insurance. Search online for a quote, and either apply online or call the company. Not all insurance firms provide this form of cover, so be prepared to have to look at companies you may not have dealt with before. 

However, if the company you insure your business with can provide this service, you may find bundling your insurance will get you a better rate, especially if you have a multi-vehicle policy.

It’s well worth looking into breakdown cover as well, given the distance a delivery vehicle will drive and the likelihood of issues arising. When arranging this, be certain a courtesy car is provided. The loss of trade and damage to your reputation caused by losing your vehicle far outstrips the minor investment of good breakdown cover, so don’t just go for the cheapest available cover.

During this process, you will likely hear about goods in transit cover. This cover insures any materials you are transporting in case of an accident. But for this industry, the cost of your customers’ meals is comparatively minimal, and this cover is not a legal requirement, so it’s up to you if you’d like to take advantage of it. If you have a bespoke vehicle with storage units, you may be transporting a larger quantity of goods with a greater overall value. But for your average vehicle, goods in transit cover is not necessary.

Pay-as-you-go hire and reward

One out-of-the-box solution to delivery insurance is pay-as-you-go cover. Some businesses only deliver on certain evenings, or simply don’t have the number of delivery customers to warrant such an expenditure. Even if you don’t want to go join Deliveroo or Uber Eats, you could still use this mode of insurance used by many of their drivers.

Pay-as-you-go coverage involves logging in to an app to notify your insurer you are delivering, and paying an hourly rate, usually between £1-3/hour then logging out when you finish. This saves paying for coverage at times you don’t need it. Itis a very good option for those just starting out and are keen to obtain a chap food delivery service UK wise.

This coverage is paid on top of a regular motor insurance policy and usually matches the policy you have for social use of your vehicle. But you need to be certain that this insurer approves of pay-as-you-go hire and reward coverage as the number of brokers offering these policies is extremely limited.

How Epos Now can help!

Regardless of which option you choose, there are a number of excellent ways to get started in food delivery. Epos Now’s integration options mean this new side of your business can seamlessly merge with your existing enterprise, saving you that little bit of stress. Epos Now Delivery or our standard Deliveroo integration can be bought as part of our Hospitality Solution with all of the features you need to stay ahead of the curve and keep the diners and deliveries rolling in.

• Save time with top of the range EPOS software
• Complete transactions on the move with the NOWPay Pro+
• Switch seamlessly between eat-in and eat-out pricing at the touch of a button
• Learn more about your business with instant, accurate reporting

Contact our sales team on 0808 291 3190 or fill out your details below and have an expert reach out to answer your questions.