February 7 — Super Bowl XLIV Sunday — may be the most hyped-up day of the year for football fans, and it’s also the most exciting day of the year for many pizza parlors that see record sales that day. Yet contrary to public belief, the increase in activity is likely only to lead to bruises on the field, not more claims for pizzerias, say insurance industry experts.
The typical pizzeria will experience a 35 percent sales increase on Super Bowl Sunday, said Jeremy White, editor-in-chief for industry magazine “Pizza Today.” Dominos — dubbed the “leader in pizza delivery” by the magazine — expects a 44 percent increase in sales on Super Bowl Sunday over the typical Sunday, according to Chris Brandon, public relations spokesman for the company. “It is the busiest day on our calendar. … We will deliver over 9 million slices of pizza this Sunday,” he said.
Yum! Brands’ Pizza Hut also is expecting to benefit from game day; it is advertising in the pre-game coverage of the event and said it expects sales to increase 50 percent over a regular Sunday by receiving more than 1 million orders through various media, said Jennifer Litz, editor of PizzaMarketplace.com.
Some might think such high level of activity has the potential to lead to higher than usual insurance claims — anything from more pizza delivery driving accidents, workers’ compensation claims and assaults/robberies. Yet the claims experience shows that’s not true, said Cheryl Downey, senior vice president at Willis who is in charge of the broker’s National Pizza Program. “We reviewed data from the last 10 Super Bowls and found there are very few accidents — no more than any other time,” she said.
Willis, which has been specializing pizza parlors for more than 25 years, provides coverage for approximately 5 percent of the 65,000 pizza restaurants nationwide.
Fireman’s Fund Insurance spokeswoman Suzanne Meraz said her company’s claims experience for pizza delivery is pretty consistent regardless of the day, with the caveat that the total number of claims might increase on Super Bowl Sunday because there are more deliveries being made. The company estimates it insures 15 percent to 20 percent of the market.
A Good Defense
While pizza delivery personnel aren’t playing a contact sport, the profession has its risks. About one-fourth of all occupational fatalities in 2008 involved workers in transportation and material moving occupations, according to the Bureau of Labor Statistics. Driver/sales workers and truck drivers, the group that includes pizza delivery drivers, experienced 22.8 fatalities per 100,000 full-time workers in 2008. That fatality rate ranks the occupation more dangerous than taxi drivers or chauffeurs, and just slightly less dangerous than roofers or ranchers, BLS statistics indicate.
Yet Downey suspects that there are relatively few claims at pizzerias because of good risk management practices. Typically, a pizzeria will purchase a package policy that includes coverage for liability issues, crime, workers’ compensation, and employee-related claims. If the pizzeria has a delivery service, that is added onto the program, taking into consideration the quality of the driver, age, maturity and vehicle maintenance, among other things.
Most pizza operators don’t provide vehicles for their drivers — workers who are hired to deliver pizzas typically use their personal vehicles and are required to have insurance. However, insurers often exclude delivery service on personal insurance policies, Meraz explained.
To help provide coverage for that gap, most franchisees of large pizza chains have umbrella policies that kick in at some point. There are also agencies that specialize in delivery driver coverage, and that information is often distributed to the franchisees of large pizza companies, Litz said.
Fireman’s Fund said its coverage for pizza operators includes coverage for property, premises, as well as the drivers when making deliveries. “The insurance kicks in if anything happens during that time of delivery,” Meraz said, noting the insurance covers accidents (whether the driver is responsible or another party is responsible), plus assault and robbery in the process of delivery.
“If a pizzeria has delivery, the premium will increase, but not that much,” Downey said. She said rates will depend on what percentage of the restaurant’s sales come from deliveries; the higher the percentage, the higher the premium. But, the broker won’t insure any restaurant that provides a time guarantee on its delivery.
Time guarantees on delivery were more common in the industry prior to 1988, Downey said. But following an accident in which a woman was struck by a Dominos driver that led to a multi-million dollar lawsuit, the industry developed safer operating practices, she said. “It’s a very good exposure compared to back then,” she said.
Driver training also has helped to improve claims experience in the industry. Pizza delivery drivers typically are more experienced drivers, and a manager often will drive a route with a new driver to familiarize the person with the territory, Downey said. Her company also requires training for the pizza delivery personnel it insures. The company has a software system to manage the 25,000 pizza delivery drivers that it provides coverage for so that the company knows, for instance, when a driver’s insurance policy is about to expire. Downey noted the company adds 200 drivers per week to the software system.
So no matter what the final score is between the New Orleans Saints and the Indianapolis Colts, it’s likely that pizzerias and the agents, brokers and carriers that insure them will be the Super Bowl winners.
“More pizzas might be sold on Super Bowl Sunday, with [perhaps drivers] delivering 10 pizzas at a time instead of one to a household, but that doesn’t seem to have led to more claims,” Downey said. Perhaps there are fewer accidents because more people are home watching the game [rather] than on the roads, she said, noting, “we’re very happy not to have a lot of losses.”