Last Updated: February 22, 2024, 12:24 pm by TRUiC Team

Food Delivery Service Insurance

Getting food delivery business insurance is essential.

Food delivery services need to be protected against a variety of foreseeable risks, such as product liability claims from food poisoning accusations, contract disputes, and delivery rider injuries.

We’ll help you find the most personalized and affordable coverage for your unique business.

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Food Delivery Service

General liability insurance is — generally speaking — one of the most important insurance policies for food and restaurant delivery services. 

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

Even so, your delivery service will likely need to purchase additional insurance policies in order to be “fully” protected from all foreseeable risks.

Such policies include:  

  • Product liability insurance: Protects your delivery service business against food-poisoning allegations, as well as from other product-related harm.
  • Business Interruption Insurance: This covers lost income and certain operating expenses if the business is unable to operate due to a covered disaster. For a food delivery business, this might cover losses incurred if a key facility is damaged or if a major supplier is disrupted.
  • Cyber Liability Insurance: If the business collects and stores sensitive customer information (like credit card numbers), cyber liability insurance can cover losses related to data breaches or other cyber incidents.

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Cost of Food Delivery Insurance

On average, food and restaurant delivery businesses in America spend between $450 - $1,000 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a food delivery service to other professional industries using the graph below.

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Graph showing average price of general liability insurance prices per industry

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Common Situations That General Liability Insurance May Cover for a Food Delivery Service

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Example 1: A competitor claims your new commercial includes damaging statements about their company and files a defamation lawsuit. General liability insurance would cover your legal fees and any damages awarded in a settlement.

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Example 2: While visiting your office to claim a prize they won in a social media contest, a customer accidentally trips on a computer cord and seriously injures themselves. General liability insurance would cover the customer’s medical bills and your legal fees in the event of a lawsuit.

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Example 3: As a delivery driver unloads office supplies at your receiving dock, the ramp malfunctions and damages the delivery van, your office supplies and the rest of the driver’s packages in the van. General liability policy would pay to repair the van and replace all of the damaged inventory.

Types of Food Delivery Services Insurance

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

Commercial Auto Insurance

Any vehicle you use primarily for business requires commercial auto insurance because personal auto policies typically don’t cover work-related accidents. This coverage protects your vehicles, food delivery drivers, and others on the road in the event of an accident by covering accident-related vehicle repair costs as well as the medical treatment for anyone injured.

Note, insurance for delivery drivers is more costly than a personal auto insurance policy. However, personal auto insurance coverage doesn’t offer the same insurance coverage as delivery driver insurance. Food delivery driver insurance is required if you’re going to deliver food, even if you’re using your personal vehicle. And food delivery businesses may need commercial auto coverage along with rideshare insurance.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a work-related accident.

Home-Based Business Insurance

If you operate out of a home office, check with your homeowners insurance provider to ensure your policy protects you against liability from business-related accidents. If not, consider adding home-based business coverage to your business owner policy (BOP) or your existing home insurance policy.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your restaurant delivery service:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Food Delivery Service Insurance FAQ

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Generally speaking, yes. Getting the right business insurance before you begin operating will ensure that your service is protected from the following risks:

  • Delivery driver traffic accidents
  • Food poisoning allegations
  • Employee payment disputes or other employment law-related claims
  • Physical injuries 
  • Property damage

Not necessarily. Certain exceptions may be written directly into your restaurant delivery service insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.

Yes, food delivery drivers generally require commercial auto insurance. Personal insurance policies might not cover accidents while delivering food. It's important to consult insurance providers for pizza delivery insurance or commercial auto insurance policies. The cost of delivery driver insurance varies among car insurance companies.