Grocery Delivery: Who’s Liable in a Car Accident?

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An article in 2018 stated that by 2022, online grocery would be a $100 billion business. With current events like COVID-19, online deliveries are seeing even more of an increase. More Americans are buying online and having their groceries delivered to them. Like it or not, grocery delivery services are a convenient service that customers have come to expect. It’s not going away anytime soon.

Previously, we’ve discussed the liabilities that grocers need to mitigate actively. Grocers who want to move into the grocery delivery space can choose from different service models, including: 

  • Customer Pickup (i.e., Curbside Pickup)
  • In-house delivery
  • Third-party delivery services like Instacart

Grocery store building guidelines mandate certain factors that ensure the safety of grocery store employees and customers. But when a grocery store employee leaves the premises to drive on the road or enter a customer’s home, it is much more difficult for the employer to control factors that could put the public at risk. Also, third party delivery services may not have the right coverage if an accident occurs.

Employers could be exposed to liability if car accidents occur

In-house delivery

Car accidents are common, especially in big cities. Employees asked to drive during working hours will be exposed to a higher risk of car accidents, even if the accident was no fault of their own. If a customer or the other party involved in the car accident decides to sue, the grocery store owner/employer most likely will also be sued and might very well be held liable for any injury or damages.

Retailers who decide to deliver groceries will need to re-evaluate their insurance risk profile if employees plan to drive as part of their job. Employers should consider offering safe-driver training and will need to ask potential employees about their driving history.

Employers will need to consider whose car the delivery drivers will be using. If employees are asked to use their own vehicle and are involved in a car accident while at work, it is unlikely that their personal auto insurance policy will provide coverage. Grocery stores may consider purchasing their own fleet of delivery vehicles, but that comes with its own set of expenses and liability considerations.   

A single car accident can lead to millions of dollars in financial exposure, which would exceed the limits of most Commercial General Liability (CGL) insurance policies. An excess or umbrella insurance policy is an excellent way to protect a business that is considering venturing into the world of grocery delivery services.

Third-party delivery services

For grocery stores that decide to use third-party delivery services, the liability picture is better, but not perfect. Many third-party grocery delivery services carry commercial insurance policies that may cover their drivers in the event of an accident.

Others encourage their drivers to purchase commercial insurance policies but may not always verify that the driver purchased coverage. If a driver is involved in an accident but only had a personal liability insurance policy, the grocery store might be targeted as a defendant in a lawsuit for anyone involved.

Get the right coverage

McGowan Excess & Casualty (MEC) is a Program Administrator and Specialized Insurance Broker that provides customized insurance solutions for a broad range of clients, including retailers and grocery stores.

Learn more about McGowan Excess & Casualty and our Umbrella & Excess Liability insurance Coverage, then contact us today to speak with one of our qualified brokers to discuss how we can help.