A recent Barron's report suggests the volume of food ordered online is likely to rise by 20% per year and by 2030 sales may exceed $300 billion internationally. Food delivery has progressed well beyond simply pizza; in fact, delivery accounts for approximately 10% of sales at McDonald's locations that offer the service. Delivery has shown to potentially boost sales.
UberEATS is now operating in roughly 65 cities and many restaurants including Applebee's and Outback have experimented with delivery service. Grocery stores also now offer delivery is some regions. Insurance industry leaders warn that businesses may be exposing themselves to significant unforeseen liability concerns regardless of whether using in-house delivery staff, independently contracted drivers, or third-party delivery providers.
Need to Evaluate Risk
Anna Tauzan, vice-president of marketing for the Texas Restaurant Association, says a coalition of restaurant associations from across the country is working to establish a clear standard for liability when working with third-party delivery companies. Expansion in this realm of delivery also is driving demand for qualified local drivers. Uber is among the leaders in addressing liability, as their agreements require that both parties maintain commercial liability insurance coverage and pay workers compensation where required.
Drivers Being Harmed
Delivery drivers have and continue to be victims of crime, as some of the recent incidents include:
- In June, a pregnant delivery driver in Atlanta was pistol-whipped by robbers
- According to the Baltimore Sun, a driver delivering to a University of Maryland dormitory was assaulted and robbed at knifepoint by a mob of 15 teenagers
- The Indianapolis Star reported a 24-year-old driver was shot to death and his body was left in a vacant home
Employing Your Own Drivers
Those who employ in-house drivers as employees expose themselves to potential vicarious liability, which makes a company potentially liable for the actions of those working on their behalf. These businesses should implement policies and procedures that involve pre-employment (background) screening of drivers by reviewing their driving record and criminal history.
Those hired should be properly trained and have clearly written expectations for conduct. The companies should be sure they have proper insurance coverage with sufficient levels of liability coverage. Those businesses near state borders may need to address laws and insurance regulations from both states where their drivers may be operating.
Use of Personal Vehicles
The International Risk Management Institute explained that those with delivery employees who are using their own vehicles must clearly identify potential pitfalls. There may be major problems among employers who are relying on their driver's personal automobile insurance policies for incidents that may involve injuries, fatalities, or property damage. Perhaps the employee allows their policy to lapse or has insufficient coverage limits? Some personal policies also have a specific exclusion that denies coverage for business use.
Using Third-Party Delivery Providers
Often organizations working with third-party suppliers or service providers fail to review these legal ramifications until an incident occurs. Liability in these relationships is typically based on the terms and scope of the agreement between the parties. There should be a written document defining the relationship between the parties, who the driver is acting on behalf of, and establishing sufficient coverage minimums. Businesses may want to include indemnity clauses in these agreements and should seek input from their insurance provider and/or experience legal counsel.