Along with other changes necessitated by quarantines, more businesses, particularly restaurants and groceries, are expanding their services to include home delivery. Typically, the delivery service offered is within a five-mile radius of the business. Some of these businesses have begun to use bicycles, golf carts, etc., to make these deliveries to nearby customers. In densely populated areas, choosing to use means other than a vehicle can be faster, cheaper, and more eco-friendly.

This isn't a new practice for some businesses, particularly pizza deliveries. In places such as college campuses and retirement communities for example, use of bikes and golf carts has been standard practice. Bicycles can go places that cars can't such as down a narrow alleyway, along a beach or other non-road area, and are more easily maneuvered around heavy traffic areas where there are a lot of traffic lights and stop signs to contend with, as well as in navigating one-way streets. Bikes and golf carts can sometimes circumvent roadways and follow pre-designed paths, such as those designed for the elderly to travel within their designated communities, or in mountainous or beach areas where there are fewer roads. Finding adequate parking space is an added advantage to using these smaller modes of transport for deliveries.

While businesses in some areas have long used bike delivery companies to make deliveries, such as Sacramento, other businesses are using normal staffers to make such deliveries.

Even so, businesses pursuing these methods should consider safety, maintenance and weather before taking to the road. Here are some of the benefits, challenges and best practices to consider for bicycle or golf cart deliveries.

Businesses who use bikes and golf carts have found them a great way to brand their business – such as using the same colors as their business for the bikes/carts, adding the company logo, using branded containers, and outfitting the delivery person accordingly.

Outside of normal deliveries, bikes and golf carts can also be taken to festivals and other outdoor events where getting vehicles into a crowded area is often difficult.

Trailers can be added which with temperature controlled containers can facilitate keeping foods hot or cold while traveling. These too can be designed with the company colors and logo. However, these are not designed for large corporate or catering orders, or those over long distances, since they typically can carry only a limited amount of goods.

Weather is another factor to consider, as they are not accommodating in extreme weather conditions and travel may be more limited than with a vehicle.

Even in warm, sunny weather, safety is a major concern for bicyclists, especially on crowded city streets. Insurance companies may be wary of bicycle delivery because of the added liability issues associated with bikes.

Maintenance is also a key consideration if the business does not outsource, with electric bicycles and golf carts requiring more technical and precise knowledge for repairs and maintenance.

How is a business's insurance affected by using bicycles and/or golf carts for deliveries?

Delivering by bike or golf cart can create concerns with workers' compensation and liability insurance. For example, it may be difficult to obtain workers' compensation insurance for the driver(s) through the standard market for such exposure, and it may be necessary to obtain such coverage through a specialized market or state-run workers' compensation fund.

Under the Business Auto Policy (BAP), the term "auto" means a land motor vehicle, "trailer" or semitrailer designed for travel on public roads; or any other land vehicle subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged – but "auto" does not include "mobile equipment". Since a bicycle is not a motorized unit, it would not be afforded liability coverage under the BAP.

Therefore, liability coverage would be afforded under the CGL. A golf cart is not designed for travel on public roads; therefore it meets the definition of "mobile equipment" under the CGL. However, if it is driven on public roads, then it would not qualify as "mobile equipment" under the CGL and would therefore need specialized coverage, such as ATV insurance, or auto insurance for low speed vehicles (LSV).

Depending upon the state where the unit is garaged and driven, there may be different insurance requirements. Since the laws vary by state, it's a good idea to make sure you get the right coverage for how and where the unit is being used.

For businesses considering proceeding with using bicycles and/or golf carts for deliveries, consider the following safety measures:

  • Make sure the driver always wears a helmet and abides by state and local laws. Even though a bike is not a motorized vehicle, it is still required to adhere to traffic laws.
  • It is a good idea for the driver to be a licensed motor vehicle operator so they are aware of all traffic laws.
  • For night deliveries, the driver should use lights and wear reflective clothing.
  • A pull-behind cart, or bike trailer, is preferred over having the bicyclist juggle the goods in their hands or in a basket, as this will help stabilize the unit and keep the driver's hands and vision free.
  • If outsourcing bicycle deliveries, ask for proof of insurance before utilizing these services.
  • Make sure the units are properly maintained and that the lights, brakes, tires, etc. are in good working order.
  • Before sending the driver out, ensure that the route(s) they will be traveling are not undergoing road construction or road closures, or consider alternative routes.
  • It is recommended that you have your drivers check their units before each trip, making sure the tires are inflated, the brakes work, and that their load is properly secured.
  • If the driver is free to use any and all routes for deliveries, the owner should be made aware of this as this could increase liability exposures and require additional safety precautions.

While many insurance departments have issued bulletins encouraging personal auto carriers to extend coverage to drivers using their personal autos for deliveries, a bicycle is not a personal auto. A few states have stated that bicycles, motorcycles and motor scooters be covered under the personal auto as well if the personal auto policy already has coverage for motorcycles. However, most states have not included that exception. Bicycles are not personal autos, and there is no coverage for the drivers under their personal auto policy. Even a motorized bicycle is not considered to be a motorized vehicle.

The homeowners policy does not exclude bicycles from coverage, but excludes liability for any business activity conducted by an insured. Golf carts owned by insureds receive some liability coverage under the homeowners policy but the golf cart is limited as to where that liability coverage applies. Coverage is limited to the insured premises, within a golfing facility or other recreational facility that allows golf carts, or a private residential community, including public roads within that community which is subject to the authority of a property owners association and contains an insured's residence.

A restaurant wanting to use bicycles for delivery needs to discuss obtaining insurance with its agent or broker; there is no endorsement under the homeowners or the business auto policy for the use of bicycles as delivery vehicles, so specialty coverage is needed.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.