A Complete Guide to Insuring On Demand Delivery Start-Ups
There is a growing need for On Demand Delivery Start-Ups. Although it may seem easy enough to do, few think of the potential liabilities and insurance coverage they will need to get started. Many of us are still working remotely and might not ever return to the office. We will also continue to turn to the convenience of ordering food and goods through the click of a button.
Nationwide states are opening their doors for business to resume, but the psychological effects of COVID-19 are everlasting. Restaurants and retail stores are ready for in person dining and shopping, but many people are not rushing out of their houses.
People will still want to social distance and refrain from unnecessary trips to the store. Others now prefer the time saving convenience of Instacart, Amazon and DoorDash.
When COVID first hit, Amazon and Instacart could not keep up with the demand. Amazon Prime members were no longer getting 2-day shipping and Instacart deliveries were hard to come by. There were days I would check the app several times throughout the day for a delivery slot just to avoid going to the grocery store.
Moreover, you may have found that contacting your local insurance broker to handle insurance for On Demand Delivery Start-Ups just isn’t working – and we know why!
Finding the Right Broker for On Demand Delivery Start-Ups
If you are planning to be the next Postmates or DoorDash, you need to prepare and think about insurance before launching On Demand Delivery Start-Ups. One of them is finding the right broker. Not all brokers are created equal. You will need to find someone that has access to more than one carrier writing Hired & Owned if you are planning to utilize a peer to peer model. If you are planning to own a fleet of vehicles, contacting American Business Insurance will allow you to utilize our Period X™ platform for when vehicles are not operating. We are also close to launching a Period 0™ platform for when cars log into the app.
Commercial auto insurance can be expensive, but ABI is able to connect with your IT team to fully integrate with your app. This means you can spend more time running and growing your business. Which in turn, equates to less time handling insurance.
With our CarTeq™ technology, we provide oversight to On Demand Delivery Start-Ups which is essential (no pun intended) to any successful business.
Be Prepared for the Insurance Buying Process
Create the app and have it mostly finished before you start shopping for insurance. Underwriters will want to see what your app looks like before quoting. Many will not spend time quoting your account until they know the app or website is close to completion.
Have a business plan and projection. Many carriers want to see a certain level of planning and investment has been done before quoting. They will usually ask for financials and a marketing plan. They want to see a safety manual (we can help you with that!) and feel comfortable that the On Demand Delivery Start-Ups will be able to compete with the Postmates and DoorDashes of the world.
Create a bio or resume for all key officers. Insurance companies like to see where you came from and how you ended up in the ODD (on demand delivery) space.
Understanding the costs. Most insurance companies have minimum annual premiums ranging from $75,000-150,000. Financing options are available but be ready to put at least 20% down. Sometimes, these premiums are minimum regardless if you operate 1 day or a full year.
Shopping around. There is an abundance of personal auto carriers out there. But, there are only a handful of companies offering insurance for On Demand Delivery Start-Ups. American Business Insurance works with them all. So, there is no need to shop around. Who doesn’t love one stop shopping?
So Much to Do, So Little Time to Do It
There is a lot to think about when navigating the insurance buying process for On Demand Delivery Start-Ups, but lucky we are here to help! We’ve helped many others with integrating insurance into their business and we are at the forefront of Insurance Technology.
Not sure where to begin? The first step is contacting us for a full business plan review and insurance quotes. From Full Commercial Auto Liability Insurance, Hired & Non-Owned, Workers Compensation, Directors and Officers Coverages as well as Employment Practices Liability Insurance – we are excited to hear what you have cooking and how we can help move On Demand Delivery Start-Ups forward.
Written by Laura Loftus who is the Executive Broker/Sales and Marketing Manager at American Business Insurance Services, Inc. She has more than 10 years of experience insuring business in the For-Hire, Livery, Transportation Network Company, On Demand Delivery & Shared Economy industries. Looking for a quote on your business? Call us Monday – Friday, 8 am to 5 pm pacific: 800-980-1950 or email us anytime!