What Are the Grubhub Insurance Requirements? Insight from the Food Delivery Injury Attorneys
The convenience of having food from your favorite restaurants delivered right to your door has become somewhat of a habit in Los Angeles — especially due to the current coronavirus emergency. Going had-in-hand with this is the demand increase for delivery drivers for several food delivery service apps.
According to data collected by Second Measure, meal delivery services saw year-over-year growth of 24 percent collectively through the end of March 2020. Grubhub is the third most popular food delivery service in Los Angeles after Postmates and DoorDash. Grubhub and its subsidiaries including Seamless and Eat24, took in 28% of U.S. consumers’ meal delivery sales in March 2020.
However, Grubhub attracts high-frequency customers better than any other service. In the first 10 weeks of 2020, 17% of Grubhub’s customers ordered food at least once a week, on average. Additionally, over 2% of its customers placed orders an average of three times per week or more.
If you decide to start working for a food delivery service company like Grubhub, it is crucial to understand that your personal insurance won’t suffice in the event of an accident. Unfortunately, most companies allow you to sign up to drive for them with just your personal insurance, yet fail to inform hopeful drivers that they won’t be liable for damages in case of an accident.
Since doing these types of jobs requires an additional commercial or business-use policy, your personal insurance most likely won’t cover any damages. And since these companies don’t usually cover their independent contractors, you’ll end up with the short end of the stick.
In order to work for companies like Grubhub, drivers need a personal auto insurance policy that covers the commercial use of a car — no matter if you perform deliveries part or full time. The rates for business use of a car are significantly higher than the ones for personal use, and that is because the risks of being on the road increase due to:
- The frequency of driving
- The time spent driving
- Where one drives
- The distraction issues related to keeping an eye on the order and the navigation
Commercial and business-use policies are designed to cover the risks when you use your personal car for commercial uses. Food delivery services are still a novelty, and the insurance industry is still adapting to the changes. That’s why it’s very important to check with your current insurance carrier on what your options are in terms of coverage if you’re considering working as an independent contractor for food delivery services.
The Grubhub website is vague, only stating that you need auto insurance and a driver’s license to work with them. As opposed to companies like Doordash and Postmates, which both only cover property damage or bodily injury caused to third parties and not the drivers working for them, Grubhub doesn’t provide any kind of liability insurance to its drivers at all. This means that if you drive for Grubhub and get into an accident, no matter the circumstances, you are 100% liable for all damages. That’s why it’s of the utmost importance to have the correct insurance coverage when doing deliveries for Grubhub, especifically.
Let’s consider a real-life example: Last year, a woman working part-time as a driver for Grubhub in Fort Collins got T-boned as she was driving a $10 order of mac and cheese to a customer. Because of the accident, she got a ticket for failing to yield the right of way while making a left turn and her 2007 Jeep Cherokee was put out of commission. When she sent a claim to her insurance company, where she had comprehensive coverage, she was shocked to find out her insurance wouldn’t cover any of the damages because the accident happened on the job, and she did not have the necessary insurance that would cover her.
Moreover, she also owed the other driver’s damages. After restitution, court fees, and paying off her totaled Jeep, which she still owed money on, the at fault Grubhub driver estimated that she owed about $60,000, and will probably have to file for bankruptcy.
Because she was a delivery driver — which companies like Grubhub catalogue as independent contractors and not employees — she needed to add a ride-share endorsement to her policy in order to be covered. And because she didn’t have that, and the crash happened on the job, her insurance wasn’t liable.
Yes, business-use add-ons and commercial insurance can be expensive. But if companies like Grubhub aren’t going to look after its drivers, it is essential that food delivery drivers ensure that they’re covered properly in case of an accident. Injuries and property damages resulting from car accidents can easily rack up, and you don’t want to end up having to cover it all on your own just because you weren’t properly informed on the insurance you needed while delivering food for Grubhub.