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Risk Management


Taking steps to insulate the business from delivery driver risks is crucial

to the wellbeing of your franchise.

By Bill Strout

In Georgia, a jury recently awarded $11 million to a woman involved in an automobile accident with a pizza delivery person, according to Courtroom View Network. The accident occurred at night, in the rain. In California, a court awarded an 87-year-old woman with several million dollars after an 18-year-old delivery person drifted into the wrong lane and into the path of her vehicle, according to The San Diego Union-Tribune. The delivery driver suffered a medical condition behind the wheel and the jury felt the driver’s employer should have done more to ensure their driver could work safely with her condition.

As a business owner, assessing operational health is likely second nature. Regardless of whether a delivery operation is in full swing or in its early stages, here’s a new question to toss in the mix: Are we doing everything possible to protect the business from the risk of delivery operations?

The Right Insurance

First, an owner should purchase insurance to protect their business from a delivery claim. A hired and non-owned auto liability policy protects a business from liability as the employer of a delivery driver by paying claims resulting from delivery driver accidents. This policy works in conjunction with a driver’s own personal auto insurance and will kick in when a driver’s policy can’t pay anything, or can’t pay enough.

Although a hired and non-owned auto policy gives protection – usually up to $1 million – consult with an insurance company about what’s called an umbrella policy. When an accident costs more than an insurance company can pay, an umbrella policy extends policy limits. Just like an umbrella, this coverage acts as an extra layer of protection between a business’ assets and its insurance policies. 

Finally, require delivery drivers provide proof of insurance. Remember: Just because a driver has insurance on the day they’re hired, doesn’t mean the policy can’t be cancelled later. Monitor this situation by checking coverages every three months. A driver’s insurance policy can mitigate the exposure a business faces if an accident happens.

Safety at the Store Level 

Get off on the right foot by evaluating a candidate’s driving competency during the hiring process. Require a minimum of two years’ driving experience. Review each candidate’s motor vehicle record (MVR) for a snapshot of their personal safety record. It’s usually safe to assume that drivers who drive safely in their free time will be safe on the road professionally. Once hired, have drivers sign a driver’s agreement, as this will set their expectations and responsibilities throughout their employment.

Consider the unique delivery risks a business faces. For example, does a business deliver in areas with a large concentration of pedestrians and bicyclists? Are drivers more apt to encounter residential neighborhoods where children play outside? Or does a business have locations in areas of higher-than-average crime rates? Develop safety programs specific to these risks. Use tools like the Cell Phone Use Policy promoted by the National Safety Council and consult with an insurance company who may have resources to aid in the development of safety programs. 

Once safety programs are in place, implement a regular training schedule to serve as a constant reminder of the organization’s commitment to safety. Video is a great solution to continually train drivers and companies like ExpandShare are helping delivery companies set the bar for safety.

It’s true that excellence is no accident. Establish a mentoring program within stores and require new drivers ride with a manager or an experienced delivery driver to learn the safety habits that a business values. Make sure the partners chosen for new drivers have a proven driving record themselves.

Work Smarter, Not Harder 

A global positioning system (GPS) can do more for a business than provide the fastest delivery route. In fact, GPS is the next wave in protection for delivery operations. Software like Drivosity uses a GPS tracker in a driver’s car topper, or in the vehicle, to track safety performance in real time. 

Feedback from tools like this is invaluable to a delivery operation because it establishes a baseline for improvement of a driver’s behavior and their awareness on the road. Coaching based on exact safety data leads to improved performance, as it is targeted to each driver’s deficiencies. As we know, improved driver performance lessens the risk to a business.

With the right insurance, an eye towards safety and technology in the passenger seat, the health of a delivery operation will be in the fast lane.

Bill Strout is president of Intrepid Direct Insurance, a direct online, comprehensive franchise business insurance company.


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