Business Insurance

Food delivery insurance - does business car insurance cover fast food delivery?

There's a lot of confusion regarding food delivery insurance, particularly whether or not "business use" car insurance is sufficient. Spoiler Alert: It's usually not. Below we explain why.

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Food delivery insurance

Food delivery insurance is a type of hire & reward commercial vehicle insurance that food delivery drivers need to have legally before they can be paid to make food deliveries.

Regular car insurance will not cover you if you're a delivery driver. Nor will 'business use' insurance cover delivery driving on its own. A delivery driver needs hire & reward cover. According to UK law, it is illegal to make paid deliveries without hire & reward insurance.

So, just like you need 'social, domestic & pleasure' to cover your day-to-day personal driving and 'commuting' to cover driving between home and work, a delivery driver needs 'hire & reward' to cover making deliveries.

There are two ways to go about getting hire & reward insurance if your existing insurer won't cover your delivery work:

  • Ask your existing insurer if they'll expand your cover to include hire & reward for delivery driving, or
  • Buy a top-up policy that covers your delivery driving only (and you keep your existing social, domestic & pleasure policy to cover your personal driving), or
  • Buy a new commercial policy that covers both your personal and delivery driving on one policy (and you cancel your existing social, domestic & pleasure policy)

Note: the second option won't work for everyone, because a lot of big SD&P insurers won't continue to cover you if you also use your vehicle for deliveries (even if you have separate cover for that).

Does business insurance cover food delivery?

'Business use' car insurance does not cover food or other delivery drivers who are paid per delivery. There are three classes of business use car insurance, and none of them cover drivers who are paid for making deliveries.

Classes 1 and 2 only cover driving between multiple places of work (but where the driving just gets to you the place where you do the work you're paid to do)—for instance, a self-employed physical therapist who drives to and from clients' homes or between multiple clinics for work would need business class 1 (or class 2 if they expand cover to include a coworker or employee).

Some people mistakenly say that Business Class 3 covers delivery drivers, but it does not. Business Class 3 covers 'commercial travelling' such as long-distance driving to make business calls without prearranged appointments. Travelling salesmen use Business Class 3; food delivery drivers do not.

Note: This article is meant to be educational only. Terminology and policy wordings can vary from one insurer to the next, so in all cases you must discuss your work with your insurer to make sure you're covered. Don't rely on what you read online or assume you are covered. If your current insurer can't cover your delivery driving, talk to a broker. If you don't have a broker, fill out a form here.

What insurance do I need to deliver food?

Anyone driving their car to make paid deliveries needs to arrange delivery driver insurance. Specifically, this is a form of commercial vehicle insurance called 'hire & reward' is what you need as a delivery driver—whether for fast food, takeaway, or parcel delivery.

Here is where the terminology gets confusing. While 'business use' car insurance does not cover delivery driving, a form of 'commercial' vehicle insurance does. Some people use the words 'business' and 'commercial' interchangeably, but when it comes to insurance they mean very different things.

Public liability insurance for delivery drivers

If you are a self-employed delivery driver then you should also take out public liability insurance. Public liability insurance covers legal costs and compensation payments if a third party (like a customer) claims you've caused them accidental injury or damage and sues you.

For example, if when you're handing over a bag of spaghetti bolognese the bag breaks and the pasta lands with a splat on a customer's white carpet, they could claim you're responsible for paying to replace carpet and sue you for damages.

If you are an employee of another company (e.g., you are employed by and only deliver for a local restaurant) then you are probably covered by their public liability insurance, but always ask to be sure.

Food delivery insurance UK quote

Your existing private car insurer is unlikely to cover delivery drivers. But you must by law inform your current insurer if you take on delivery work—you can then ask if they'll expand your coverage. If they won't then you can either:

  • Ask your existing insurer if they'll expand your cover to include hire & reward for delivery driving, or
  • Buy a top-up, pay-as-you-go type of courier insurance to use when making deliveries (assuming your existing provider will accept you doing that and still cover your social, domestic and pleasure driving—you must ask about that, too) or
  • Buy a new specialist policy that will cover both your delivery driving and your social driving

To get a quote from a delivery driver specialist, click here to fill out a short quote form. Up to three insurance providers will contact you to proceed with the quote and answer any questions you still have.

If you need fast cover, get started immediately because sourcing food delivery insurance can take a little while.

Pay as you go food delivery insurance

Pay As You Go (PAYG) food delivery insurance is a 'top-up' cover that you buy in addition to your regular (i.e. social/domestic) car insurance. Your regular car insurance covers your personal (non-work) driving, while the PAYG insurance covers your food delivery driving.

Companies like Zego and Inshur are two of the most popular PAYG food delivery insurers.

You can read more about PAYG food delivery insurance, including the pros and cons, in our article here.

How much is food delivery insurance?

NimbleFins research indicates that a food delivery driver with a good history of delivery driving can expect to pay on the order of £220 per month for Third Party Only cover (£2,600 per year) and £260 per month for comprehensive (~£3,100 per year). These quotes reflect pricing for our sample 40-year-old driver from Zego, who drivers consistently rate as one of the most cost effective options for courier coverage.

Average Cost of Food Delivery Car InsuranceMonthly Cost
Third Party Only£220

Rates can be highly variable, however. And it can be difficult to get a quote, especially for a younger driver without a history of safe food delivery driving. And most big insurers and underwriters tend to steer clear of offering policies for delivery drivers. That said, Admiral now covers delivery driving.

Also be careful that if you go the pay-as-you-go hourly/top-up coverage route, this may invalidate your existing policy, so check out our guide to which insurers accept PAYG cover. If your current car insurer won’t work with PAYG like Zego, you may need new cover altogether.

Why is delivery insurance so expensive?

Food delivery drivers are often put into circumstances that can make accidents more likely. For example, a food delivery driver is likely to engage in the following driving patterns that they wouldn't normally do—all of which are risky:

  • Often driving for long hours consecutively
  • Unsociable driving hours
  • Stopping in dangerous spots or on busy roads
  • Risky driving style to meet tight deadlines

While this list is by no means exhaustive, it should give you some ideas as to why insurers charge so much more for food delivery insurance than other types of car insurance (and why some insurers won't cover delivery insurance at all!)

As with any vehicle insurance, age and no claims play a massive part in dictating the cost of your policy—especially as delivery work becomes a more popular option for younger, more 'risky' drivers and riders—so if you are a certain profile (e.g. under 25), keep in mind you may have to pay a lot more than our estimates.

Erin Yurday

Erin Yurday is the Founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.