A recent article in The Washington Post discussed how Walmart, in an effort to cut delivery costs, is allowing employees to volunteer to deliver packages from the store to customers’ homes.
This is called 'the last-mile' in a delivery, and for many companies, it is the most expensive part of the process.
Here's the cost-cutting idea hatched by Walmart executives: Trucks deliver goods to the store closest to a package's final destination, then store employees can volunteer to deliver up to 10 packages a day after their shift is over, in exchange for compensation including overtime pay.
So far, the Walmart program is being tested in New Jersey and Arkansas. The company has not disclosed expansion plans for the program, nor has it shared such details as whether employees are paid per delivery, distance or time.
What's the risk?
There is also a coverage quesion: How will volunteer, overtime deliveries impact an employee’s insurance?
When delivering packages, will coverage be excluded, as the personal auto policy excludes liability, medical payments, and uninsured motorist coverage that arises out of the use of the vehicle as a public or livery conveyance?
This was something many Uber and Lyft drivers discovered the hard way. Much to their dismay, these drivers, who put themselves out for hire and offer rides in their personal vehicles, have auto policies that would not provide coverage in the event of an accident.
But the Walmart scenario is different, and it's shared by other workers.
The employee is not holding himself out to the public for hire; there is no app where you can hire someone to go get your package at Walmart and deliver it to you. Instead of the package being delivered by UPS, USPS, or some other carrier, a Walmart employee would drop it off at the consumer's home.
This is more like pizza delivery. The Domino’s driver is not holding himself out for hire to get you a pizza. He works for Domino’s, is paid by Domino’s, and brings your pizza from a Domino’s store.
With the Walmart program, employees delivering packages is the same: These people work for Walmart, the business from which the package was purchased. These Walmart employees are therefore covered under their auto policy for delivering packages for Walmart.
The Washington Post story goes on to address the treatment of Walmart employees in general, and the coverage issue is clear: As long as the employee is not signing into an app where private individuals can hire them to retrieve and deliver packages, and the Walmart employee is working for Walmart, then that employee’s insurance will cover them for accidents that occur while delivering packages to Walmart customers.
Christine G. Barlow, CPCU, is managing editor of FC&S Online, the unquestioned authority on insurance coverage interpretation and analysis for the P&C industry. To find out more, visit the National Underwriter website.
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