While the delivery economy has been on a steady uptick for many years, with companies like Uber, Amazon, and PostMates leading the industry, it’s no secret that the Covid-19 Pandemic has brought the economy to an entirely new level. Many restaurants that were forced to close down opted for delivery instead of totally shutting down shop. What started as a trial period to make up for the intense restrictions across cities and states, turned into a permanent and very successful business strategy for many.
It’s not just a restaurant either. E-commerce has seen record increases in online shopping and traditionally in-store places like grocery stores and local florists have seen the advantages of delivery and implemented them into their normal business practices. Consumers and companies see the advantages of delivery go far beyond a Covid necessity. It gives businesses access to new demographics, aids convenience, provides safety measures, and increases sales.
As the number of delivery trucks and drivers increases, so does the need to properly insure them. Most delivery drivers work as independent contractors, meaning they don’t likely have workers’ compensation or auto insurance under their employer. Delivery poses new risks not only to the drivers and the vehicles but to the goods being carried to the consumer as well. There’s no saying when Covid will truly be over, and there seems to be no desire to go back to a pre-delivery economy. So, insurers and legislators are re-addressing risks, adding new coverages, and finding ways to make sure everyone is covered in the delivery world.
Changes in Regulations For Drivers
Businesses are implementing delivery left and right to keep up with competition and of course, abide by the ever-changing Covid-19 restrictions. Delivery drivers always need to be covered by the mandatory limits of the state in which they operate a vehicle. Whether that coverage comes from the company’s commercial policy or the driver’s personal policy, if there is driving on public roads, state minimum needs to be met. In response to the expansion of delivery, some states are drawing up bills that would require higher limits of insurance for all delivery drivers. There has been a lot of concern about whether or not businesses are actively aware of which drivers have insurance, and legislators feel that if an individual is driving on behalf of the company, they should be insured under the company policy.
Senate President Nicholas Scutari has recently proposed a bill that would require drivers that deliver for companies like DoorDash and Uber to carry up to $1.5 million in uninsured motorist coverage, bodily injury, collision, and property damage. He noted that “Insurance companies can deny claims if a driver does not have this coverage. That would leave the driver, the customer, and any other victim without fair compensation.” These types of bills are likely going to be implemented across the nation as insurance companies and government officials scrutinize the new risks our economy faces. Whether Covid-19 ends or not, delivery is here to stay and coverage needs to reflect it.
Last Mile Insurance
Bills and legislation might be in the works, but the majority of states don’t have hard requirements from businesses as of right now. Independent drivers are at risk of having no coverage for business-related accidents if they don’t have their own personal policy. That’s where Last-Mile Delivery Insurance has been filling in the gaps. Last Mile Insurance covers drivers against potential liabilities while actively driving or delivering. This insurance covers physical injuries, property damage, some cyber liability, and protects against third-party claims. Delivery comes with risks that have the potential to cost hundreds of thousands of dollars, and Last Mile Insurance can act as the necessary protection against those risks. It covers all types of deliveries including food services, medical supplies, parcels, and transportation. This type of coverage can help protect against unknown risks, and risks that may be difficult to get coverage for through an employer.
More Eyes On Cyber Risks
The delivery system is an almost entirely digital process. From the order of the goods to the tracking and confirmation of delivery, important consumer information is communicated digitally now more than ever. The Covid-19 era saw a prevalent increase in cybercrime, with more than 80% being social engineering and phishing schemes. In 2021, ransomware recovery costs were over $20 billion. Cybercrime has not only increased but become much more complex. With so much sensitive data constantly vulnerable, companies need to take extra precautions to protect their users' data. Insurers are providing more information on how businesses may be at risk of a cyberattack, and how best to protect themselves.
If you think of a traditional business model with an office space, files, etc-the insurance program would match the risk by providing property insurance, business risk, etc. Now, the model is digital and insurance plans need to be updated in order to provide coverage for any potential losses. Insures are constantly educating themselves on the changes to cybercrime, and offering coverages to address the most recent risks. With delivery, businesses and individuals should be aware of cybercrime like non-payment and non-delivery. There’s also the risk of identity theft and credit card/bank hacking. Some delivery models are introducing the idea of accepting cryptocurrency which would open room for additional risks that need specialty cyber coverage. Regardless of the ways in which delivery companies use technology, there is an increased need for cyber insurance in just about every industry.
Expert Insurance With ECBM
Curious about how your business may be affected by the growing delivery economy? ECBM’s insurance team of brokers and consultants are experienced in analyzing your business risk and curating an insurance program that addresses your specific coverage needs. For more information on our team or our services, call one of our agents today.