Business insurance brings peace of mind and security to businesses in all industries. But 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 who are indeed business owners themselves, 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 advent of nuclear verdicts and losses outpacing premiums, causing 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 help your business navigate the complex insurance landscape.
Most delivery businesses need insurance policies that address the following risk types: 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.
It is critical when utilizing an independent contractor workforce, your business is set up to clearly distinguish between your business and the independent contractors you partner with. Being able to create and demonstrate separation between your delivery company and the 1099 operators is essential to minimize your risks and responsibilities. Working with a third-party administrator like Delivery Drivers, Inc. 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. Find an insurance partner who utilizes a consultative approach, understands the ins and outs of your business, and pays strong attention to detail.
Want to learn more about business insurance in the gig economy? Check out our webinar at the link below.