The courier service industry continues to expand rapidly, providing round-the-clock service for the burgeoning online retail market.
With more goods being delivered, and a demand for shorter turnaround times, self-employed couriers and larger businesses need to have adequate motor trade insurance to protect against loss, damage or delay to people’s precious cargo.
In July 2019, online purchases accounted for 19.9% of the retail market with an overall growth of 12.7% compared with the same month a year earlier, according to the National Office of Statistics. Good news for courier companies and individuals, but also more reason to find the correct motor trade insurance coverage.
Getting the Right Level of Cover
Most courier drivers are aware they need specific van insurance for their business, but there is often some confusion over what other coverage would be beneficial to keep them from being liable for unwanted expenses.
As a legal minimum, you will need a courier insurance policy to cover a third party against injury and damage. If you also want to keep your cargo protected, then you should consider a goods in transit insurance policy too.
To make sure you have the right policy in place, read our overview of the different types of insurance and how they can help your business, whether you are a self-employed delivery person or manager of a whole fleet.
What is Courier Insurance?
As couriers spend much of their time on the road, in often unknown busy towns and cities, the chances of being involved in an accident or suffering loss is considerably higher. Whether you are working as a self-employed courier, or run a fleet of vehicles, you legally need courier van insurance to protect yourself in the event of an accident.
As with general van insurance, you can choose from comprehensive, third-party fire and theft or third-party only policies. The minimal third-party policy will only cover your liabilities to others in the event of an accident, not you or your vehicle.
With the growing demand for courier services and multiple deliveries with tight time scales, it may be more cost-effective to have a comprehensive policy to avoid paying compensation from your own pocket for incidents or accidents to third parties.
For those with several vehicles, motor fleet insurance may offer a more cost-effective option.
Why Do I need Goods in Transit Insurance?
While fully comprehensive courier insurance will cover both your van and you, it doesn’t include the packages you are delivering. Goods in transit insurance provides cover for the products you transport from one location to another, either your own items or for hire and reward.
Legally you do not need goods in transit cover, but it is essential to protect your cargo from damage or destruction, loss, theft and delay. A goods in transit insurance policy should be tailored to cover the specific items you are transporting, depending on whether you have individual items or a variety of cargo.
Different goods have their own set of risks. Items such as electronics may be prone to damage, while jewellery will be costly to replace if stolen. You may have to transport perishable goods and therefore a delay would make them unsellable.
It’s better to be over insured than under insured – remember to discuss the full variety of goods you carry as you may not be covered if they aren’t included in your insurance policy.
If the goods being carried are damaged or stolen, you will often be expected to bear some of the costs, depending on the contract you have with the owner of the goods. Many companies and organisations will insist you have goods in transit insurance before hiring you to do a job, so they know that you can meet these expenses.
Additional Cover for your Courier Business
Depending on the type of courier business you run, there are some other areas that may give you greater financial protection.
- Public liability insurance: this covers you for any compensation you may have to pay as a result of damage to property or harm of a third party.
- Employer’s liability: if you have employees, this will protect you against the cost of compensation claims arising from employee illness or injury whilst at work.
- Short term policies: if you are a new start up or a seasonal delivery driver, insurers can offer monthly to quarterly policies to reduce costs of annual cover.
- Breakdown cover: Being stuck on the roadside for hours can be costly to your business. Breakdown cover can get you moving as quickly as possible.
- Excess protection: this can cover you against the cost of your excess if you’re involved in an incident.