Learn a few back-to-school commercial automobile liability insurance basics.

Read three practical scenarios involving commercial automobile liability insurance.

Schools are back in session, and pizza is on the menu. That means more business for some local pizza shops, and more pizza deliveries. Test your knowledge of automobile liability insurance by getting behind the wheel of the following pizza delivery scenarios*.

1. Employees of Pete’s Pizza Shop have loaded the company-owned truck with freshly made pizzas to deliver to ABC Elementary School. En route to the school, a traffic pattern change distracts the employee driver of Pete’s Pizza Shop, and he accidentally hits another vehicle. The driver of the other vehicle makes a claim for his injuries and damage to his vehicle resulting from the accident. Whose automobile liability insurance policy would respond to the claim?

Answer:

Pete’s Pizza Shop’s commercial automobile liability policy would respond. The pizza truck is a company-owned vehicle, driven by an employee of Pete’s Pizza Shop, and the accident occurred during the course of business operations.

2. Again, employees of Pete’s Pizza Shop have loaded the company-owned truck with freshly made pizzas to deliver to ABC Elementary School. In this scenario, the truck won’t start, even after a battery jump. Under a tight timeline to deliver boxes and boxes of pizza, the owner operator of Pete’s Pizza Shop instructs his employees to deliver the pizzas in their personal vehicles. One employee speeds to make up lost time and rearends another vehicle doing so. Whose automobile liability insurance policy would respond to the claim?

Answer:

Pete’s Pizza Shop would have no insurance protection under this scenario, unless its commercial automobile liability policy included non-owned auto coverage. This is an important distinction, as non-owned auto coverage is not automatic; it must be purchased at an additional premium charge.

The employee’s personal automobile liability policy would not provide any protection for him either, as pizza delivery is considered livery conveyance, which is specifically excluded under personal automobile policies.

3. A competitor of Pete’s Pizza Shop, Pizza To Go, saves on business costs by hiring independent contractors to deliver takeout pizzas. Joe is a college student working weekend hours driving his own vehicle, as an independent contractor, to deliver Pizza To Go pizzas. Joe’s habit is to glance at his cell phone to confirm the pizza delivery address, while driving. One evening Joe accidentally crosses the center line and hits another car traveling in the opposite direction. Whose automobile liability insurance policy would respond?

Answer:

There would be no insurance coverage for this scenario. Joe is an independent contractor, not an employee. Joe is driving his own vehicle, not a vehicle owned and used by Pizza To Go for business operations.

Joe’s personal automobile liability policy would not protect him, as pizza delivery is considered livery conveyance, a specific exclusion in personal automobile policies. Joe should purchase his own commercial automobile liability policy before any driving as an independent contractor.

*Each of the three scenarios is simplified and intended for general educational purposes.

Commercial automobile insurance is an important part of insurance protection for businesses of all types and sizes. Contact your knowledgeable and Trusted Choice Independent Insurance Agents at Richey-Barrett Insurance to discuss your insurance concerns today.