Business insurance brings peace of mind and security to businesses in all industries. With the advent of the gig economy, companies have to protect themselves in even more ways than they once did. With an increasingly complex legal environment and the nuances of working with independent contractors, risk is changing and so is insurance.
Current conditions within the marketplace reflect the consecutive poor loss ratios for the last ten years. 2019 represented a 110% loss ratio of all auto insurers combined. This is due in part to the emergence of nuclear verdicts and losses outpacing premiums. This caused some insurance carriers to leave the transportation industry. These conditions mean it’s more important than ever to work with a knowledgeable insurance partner to navigate the complex insurance landscape.
Most delivery businesses need insurance policies that address various risk types. For examples, these include automobile accident coverage, driver injury on the job, loss or destruction of goods, and catastrophic coverage. The types of insurance that cover these risks vary for businesses operating with the W2 model versus the 1099 model. The following chart demonstrates the differences between W2 and 1099 insurance by risk type.
W2 vs 1099
It’s critical to distinguish between your business and independent contractors when utilizing a 1099 workforce. Being able to create and demonstrate separation between your delivery company and the 1099 operators is essential to minimize your risks and responsibilities. Ultimately, working with a third-party administrator like DDI can help your business create this separation to minimize risk and responsibilities.
Still unsure what insurance is right for you? Working with a knowledgeable insurance partner who understands your business needs can help take the guesswork out of insurance selection. Above all, find an insurance partner who utilizes a consultative approach, understands your business, and pays strong attention to detail.