Question

Fast Pizza hires college students who drive their own cars to deliver pizzas to customers. Fast Pizza is concerned that the company may be liable for damages caused by company employees while they are driving their cars on company business.

Part 1: Discuss the loss exposures to both Fast Pizza’s business operation and to the students who are driving their own cars to deliver pizzas.

Part 2: Identify a commercial auto liability coverage that Fast Pizza could purchase to address their exposures.

Part 3: Discuss how the coverage purchased in Part 2 could impact the student drivers.  Use a loss scenario to illustrate.

Answer 1

Part 1: while driving the car by the college students if any accident happens and the third party damage happens then the liability will come to the Fast Pizza, students will not get the insurance cover for their damage to the car or their bodily injury. Therefore, it is better to cover such practice by a suitable auto liability insurance by the Fast Pizza, while car drives need to have their own insurance cover. In order to protect their cars, the drivers must have businesses use endorsement in their private car insurance policy.

Part 2. Any commercial auto liability insurance from AAA or Allstate, which covers the damage to any third party by these drivers while they are driving the car for the delivery purpose as well as damage to the drivers and their car is covered can be purchased by the Fast Pizza.

Part 3. The coverage purchased by the Fast pizza will help students to get covered for their personal damage at no extra cost and without endorsing the business use in their private car insurance.