Starting a delivery service or working as a delivery driver? Your personal car insurance policy won't cut it. Most people discover this the hard way—after an accident during a delivery when their insurer denies the claim. Whether you're running a full-scale delivery business or doing DoorDash on weekends, you need the right insurance coverage to protect yourself from financial disaster.
This checklist breaks down exactly what coverage you need, what's optional but smart to have, and when to add each type. We'll also cover the often-overlooked details that could save you thousands in premiums or protect you from coverage gaps that leave you exposed.
Essential Coverage for Delivery Services
Commercial auto insurance tops the list of must-have coverage. If your business owns a vehicle, you're legally required to carry it in most states. But here's what surprises people: even if you're using your personal vehicle for deliveries, your standard policy likely excludes business use entirely. That means if you're in an accident while delivering a pizza or picking up a DoorDash order, you could be stuck with the full cost of repairs and medical bills.
For gig workers and part-time delivery drivers, you have two options: add a rideshare or delivery endorsement to your existing policy (typically $100-$300 per year) or purchase a full commercial auto policy. California and New York actually require commercial policies for all delivery drivers, regardless of whether you're full-time or part-time. Progressive leads the market with delivery driver coverage averaging $1,532 annually for full coverage.
General liability insurance covers bodily injury and property damage that happens when you're not driving. Think about dropping a package that damages a customer's expensive vase, or slipping on their porch and grabbing their railing, which breaks and injures someone. While not legally required, general liability becomes mandatory when you sign commercial leases, apply for business licenses in certain states, or bid on contracts with larger clients.
Most small delivery businesses purchase $1 million per-occurrence limits with $2 million aggregate coverage for the year. This typically costs $400-$800 annually depending on your revenue and the number of deliveries you handle. It's worth noting that general liability doesn't cover your cargo—that requires separate coverage we'll discuss next.
Workers' compensation insurance is required if you have employees, and the definition of "employee" matters enormously here. If you're a solo DoorDash driver, you're classified as an independent contractor and won't have workers' comp coverage from the platform. But if you run a delivery service and hire drivers as employees, you're required to provide coverage in virtually every state, typically starting from their first day of work.
The employment classification question has become contentious in the delivery industry. Courts consider factors like whether drivers use company equipment, wear company uniforms, work set hours, or rely on one company for most of their income. A 2024 Economic Policy Institute study found that up to 30% of independent contractors may be misclassified, which creates serious liability exposure for businesses. If you work with Amazon Delivery Service Partners, you'll need workers' compensation with minimum limits of $1 million.
Optional but Highly Recommended Coverage
Cargo insurance protects the goods you're transporting. If you're delivering food, this might seem unnecessary. But if you're transporting electronics, medical supplies, or valuable merchandise, cargo insurance becomes critical. Coverage typically ranges from $20,000 to $250,000 depending on what you haul, with policies averaging $400-$600 annually for $100,000 in coverage.
Watch for sub-limits on high-value items. A policy with $100,000 coverage might only cover $25,000 for electronics or other target commodities. If you work with federal contracts, FEMA requires $300,000 in cargo coverage. The FMCSA mandates $750,000 to $5 million in liability coverage depending on cargo type for interstate carriers.
A business owner's policy (BOP) bundles general liability and property coverage into one cost-effective package. If you have a warehouse, office space, or store inventory and equipment, a BOP makes financial sense. In 2026, BOP insurance averages $147 monthly according to a study of 10 major insurers. To qualify, your delivery business typically needs fewer than 100 employees and under $5 million in annual revenue.
The catch? A BOP doesn't include commercial auto insurance, which you'll absolutely need as a delivery service. You'll need to add that coverage separately. But the bundled approach for liability and property coverage usually saves 15-30% compared to buying standalone policies.
Many gig platforms provide some insurance coverage, but it's limited and riddled with gaps. Uber Eats offers up to $1 million in liability coverage during active deliveries, but you must carry your own comprehensive and collision insurance, and their coverage comes with a $2,500 deductible. DoorDash provides excess liability during active deliveries but doesn't cover vehicle damage. Instacart and GrubHub provide no auto insurance at all—you're completely on your own.
When to Add Each Type of Coverage
Timing matters. Add commercial auto or a delivery endorsement before your first delivery—not after your first accident. Many platforms like Uber Eats verify your insurance when you apply and request updated proof annually. If you're caught delivering without proper coverage, you could face policy cancellation, denied claims, and difficulty getting insurance in the future.
Add general liability when you sign your first commercial lease, bid on your first business contract, or hire your first employee. Add workers' compensation on day one of hiring employees—it's required from the start in most states. Add cargo insurance when you begin transporting goods worth more than you could afford to replace out of pocket, or when contracts require specific coverage limits.
Annual Insurance Review Checklist
Set a reminder to review your insurance annually, ideally 60 days before renewal. Check whether your revenue has increased significantly—you might need higher liability limits. Review your fleet size and vehicle values to ensure coverage matches current replacement costs. Examine cargo insurance limits against the actual value of goods you're now transporting.
Verify that your coverage still meets contract requirements from clients and platforms. These requirements change, and falling out of compliance could cost you contracts. Review any claims you've filed to identify patterns—frequent small claims might indicate you need different coverage or safety improvements. Finally, shop around. The delivery insurance market has evolved rapidly, with providers like Progressive, GEICO, and USAA introducing competitive options for gig workers in 2025-2026.
Insurance for delivery services isn't one-size-fits-all. Your specific needs depend on whether you're a solo gig worker or running a fleet, what you're delivering, where you operate, and who you're contracting with. But getting the basics right—commercial auto, general liability, and workers' comp if you have employees—protects you from the catastrophic financial risks that end businesses. Start with the essentials, add optional coverage as your business grows, and review annually to ensure you're neither underinsured nor overpaying.
