Courier insurance is a financial product that is designed specifically for the courier and last-mile delivery sectors in the UK. Insurers often provide additional cover for couriers that focus on the sort of work they actually, something that isn’t always covered by conventional vehicle insurance policies. It is typically used to augment cover from that supplied by van insurance policies but also public liability insurance, in some cases.
If you work as a self-employed courier or undertake deliveries within the gig economy on a casual basis, then finding out more about the sort of cover that is on offer with courier insurance for vans, lorries or cars is a good idea. Equally, if you run a courier firm and have vans, bicycles and motorbikes in your fleet, then seeking out adequate courier insurance would be advisable. Before you immediately turn to your insurance broker to get some quotes, however, it will be helpful to find out more about this sort of cover because coverage differs from insurer to insurer.
What Kinds of Insurance Do Couriers Need?
All couriers ought to have some insurance to work. If you are driving a motorised vehicle on the road, for example, then you will be legally obliged to have adequate insurance for the vehicle in question. Typically, this will be comprehensive cover but the base requirement is for third-party insurance only. Employers in the courier industry must have employer’s liability insurance, too. However, many courier firms also have public liability insurance to cover personal injuries and so on that might occur during work.
On top of this, many couriers take out courier insurance, as well. Courier van insurance is the most common type of policy but you can also find courier insurance for cars as well as motorbike courier insurance, if appropriate for the business model. Obviously, the sort of policy that will suit you best will depend on what you drive for work or the sort of fleet you have. That said, numerous types of goods in transit insurance cover the work of couriers and this even includes food courier insurance, in some cases.
What Does Courier Insurance Cover?
What courier insurance for vans and other vehicles covers is the loss or damage of goods that are being sent from one place to another. In other words, while your clients’ goods are in your possession, they will be covered if anything untoward were to happen to them. Unless you deliberately break an item or are unduly negligent about it, you should be able to make a claim for any breakages that occur in transit. Equally, if someone steals the items being delivered or causes them to be damaged, then courier insurance will cover this unwanted eventuality. In some cases, a road traffic accident results in the write-off of a courier vehicle plus the contents inside. Usually, the vehicle insurance policy will only cover the value of the vehicle but not its contents. You need courier insurance to be able to claim for their loss.
Is Courier Insurance a Legal Requirement?
No, courier insurance is not a legal requirement for either self-employed couriers and multi-drop drivers or courier firms. However, many drivers and fleet managers take it out because it protects them from claims made by customers. Couriers that handle high-value goods could potentially go out of business if they were to be sued for losses that were incurred by clients while they were delivering goods for them. Therefore, despite this sort of insurance not being mandatory, it is often recommended by trade bodies and industry associations. Couriers do need to have insurance when they’re on the road and have adequate hire and reward cover, just like other commercial drivers, such as funeral directors or licensed taxi operators, for instance.
Is Courier Insurance the Same as Goods in Transit Insurance?
Goods in transit insurance is the overall term for all sorts of freight and cargo insurance, including marine cargo insurance and haulage freight insurance, for example. In some cases, a general goods in transit insurance policy will be perfectly adequate for last-mile delivery drivers and couriers. The difference with courier insurance is that it tends to be geared up to the specific needs of courier firms.
For example, most couriers don’t need a clause in their insurance policy about the exact tonnage of insurance that might be covered under the particular product. That’s something more suited to truck HGV insurance, for instance. As such, courier insurance is really just one type of goods in transit, one that is marketed at both self-employed couriers and courier firms. Typically, courier insurance will come with an excess amount that you can set at a level you are comfortable with which is not the case with all goods in transit policies on the market today.
How Much Does Courier Insurance Cost?
How much courier insurance costs will depend on a number of different factors. To begin with, insuring yourself as a self-employed driver is very different to taking out fleet courier insurance due to the greater number of daily journeys and drops that are likely to take place under the latter policy type. That said, the cost of a fleet policy for courier firms will often be lower per driver or per vehicle than an individual policy. This is because of the economy of scale involved.
What couriers who work for themselves or who run small enterprises with just one or two drivers need to know is that courier insurance can be quite affordable starting from around £60 to £70 per month for basic cover. If you set the excess level low on your policy, then the prices that insurers charge will inevitably go up. However, this means that, as a self-employed courier, you would be exposed to less financial risk from damage or losses. One way to save money on your courier insurance is to pay for it annually rather than monthly.
Nonetheless, this approach doesn’t suit every kind of driver or business model, especially if you know that you won’t need cover for a particular month in the year, for instance. Comprehensive courier insurance will cost on average about £1,000 taking into account the location where the driver works, the excess requested and the type of vehicle that is being driven. That said, it is certainly possible to find a cheap or cheaper policy by shopping around or using professional insurance brokers to do so for you.
Is Hire and Reward Insurance Suitable for Couriers?
Yes, hire and reward insurance is not only suited to couriers who use a vehicle they own, lease or hire for their work, but is a legal requirement, too. Therefore, even though it is not exactly the same thing as courier insurance, hire and reward insurance is certainly worth knowing about. To begin with, some commercial hire companies will not let you drive off in one of their vehicles without it if you are going to be using their van for a commercial purpose – such as courier work, of course. In other cases, they will bundle in the cost of a hire and reward insurance policy into the price of the rental agreement and you might not even know you have it unless you take the time to read all of the small print.
Essentially, hire and reward insurance is a financial product designed to offer specific classes of drivers the cover they legally need. For example, taxi drivers are obliged to have it. In some cases, food delivery drivers who aren’t couriers may be required to have it, as well. Whether it is used as a type of food courier insurance or not, hire and reward insurance isn’t exactly the same as courier insurance. For one thing, it usually covers damage to the vehicle being driven as well as personal injuries caused by accidents on the road. These are things that are not typically included with courier insurance policies although some overlap may occur.
However, like courier van insurance or motorbike courier insurance, for example, hire and reward insurance also covers certain losses for goods in transit. Typically, this will mean items are covered if they were to be involved in a road accident which caused damage to the vehicle and its contents. It won’t always mean covering damage to goods as they’re being taken in and out of a vehicle, however, so couriers may still need proper courier insurance to get the full coverage they need. Nor will it cover human errors, such as dropping off an item at the wrong address. That said, hire and reward insurance would usually cover the cost to replace goods that were lost because the van, car, lorry or motorbike that the policy comes with was stolen. In short, you can claim for the loss of the vehicle and its contents under a hire and reward policy.
Finally, most hire and reward policies cover the theft of goods from the vehicle. It is normal for such insurance to only cover stolen items if the vehicle has been broken into, however. Losses from stolen goods because the van being covered was left unlocked or open will usually not be subject to a valid claim. Overall, it is best to think of hire and reward insurance as a kind of commercial insurance that taxi drivers, chauffeurs, removal companies and other class 3 drivers need to have. Professional couriers fall into this category but often need more cover than a hire and reward policy would afford them. This is because they handle goods in both public places and on private grounds where accidents could happen outside of their vehicle.
To sum up, hire and reward insurance is tied to the vehicle and – while it may cover some eventualities with the vehicle’s contents – it doesn’t provide full, door-to-door goods in transit insurance like courier policies do. It is worth noting that Amazon Flex delivery drivers are obliged to prove they have hire and reward insurance or the internet giant will not consider them for work assignments. Amazon recommends certain insurers but you don’t have to use them for Amazon Flex insurance. Indeed, if you already have adequate cover as a courier, then you won’t need to take out specific hire and reward insurance to satisfy the firm.
What Is Fleet Courier Insurance?
Courier fleet insurance is another type of courier insurance that covers entire courier firms rather than individual drivers or riders. Typically, fleet courier insurance becomes cost-effective when you have three or more vehicles in use simultaneously for courier work. In other words, if you use your car for day-to-day work but occasionally use a motorbike for express deliveries, then you would probably want to opt for a standard courier insurance policy. However, if you are a self-employed driver and sub-contract work to two or more other drivers – or employ them directly – then courier fleet insurance is likely to work out better.
It is worth noting that fleet policies tend to include everything that has been mentioned above to do with hire and reward insurance. As such, it is suited to fleet owners who have their own vehicles but who may also employ drivers who hire or provide their own vans at times of peak demand. Therefore, losses from road traffic accidents, stolen vehicles or vehicles being broken into should all be covered. However, courier fleet insurance goes beyond these basic elements and also provides the wider goods in transit cover that most professional courier firms are seeking. Most fleet insurance policies for courier firms will cover vans that have a 7.5T GVW or below but some insurance providers have different rules.
Note that some insurers will want you to provide details of your employees’ driving histories including any points they may have on their licenses before issuing you with a quote. Cheap fleet courier insurance is often easier to gain if you agree to have telematic equipment installed in your vans and other delivery vehicles. This makes it easier for insurance companies to assess how well – or otherwise – your fleet is being driven. It also assists with validating claims, of course. Other factors that may affect the price of a fleet insurance policy are the age and model of the vehicles in your fleet, the size and nature of the areas you work in and, in some cases, the sorts of goods you typically deliver for your clients.
Can You Have Courier Insurance on a Family Car?
Yes, you can take out courier insurance for a car. Sometimes, people make the mistake of thinking that motorbike courier insurance and courier insurance for vans are the only two policy types on the market. However, numerous couriers – especially self-employed ones – use their family cars to make deliveries in, too. Under such circumstances, taking out courier car insurance is highly advisable. For the reasons outlined above, hire and reward insurance would be needed if you were to make last-mile deliveries in your car, even if that were just on weekends and the car had no commercial use during the week, for instance. However, courier insurance for cars goes beyond the basic level of coverage hire and reward insurance typically affords drivers.
Importantly, simply telling your usual car insurance company that your car is designated for business use isn’t enough for couriers. Business usage means being able to take things like samples around. That is to say, items you or your employer own that are not for sale. Equally, you can give colleagues a lift for work with business use coverage but you wouldn’t be able to charge them for doing so. As such, it is the commercial nature of courier work that counts with insurance companies, hence the need for a standard insurance policy for normal usage and a separate courier car insurance for making multi-drop deliveries with it.
What Is Food Courier Insurance?
Food courier insurance is a type of hire and reward insurance designed specifically for the needs of caterers, takeaway couriers and other drivers who handle food. Like the other forms of courier insurance you have learned about, this sort of policy protects couriers from losses and damage. The difference with food is that it is perishable so the risks associated with it are deemed to be that big higher. You’ll need it if you deliver food because this is considered a time-dependent form of delivery. Some courier insurance already covers losses associated with food and perishable items but not all do so you may need a specialist policy.
Courier Insurance in Summary
Whether you need motorbike courier insurance or a policy to cover an entire fleet of courier vans, taking out specialist cover that is specific to your commercial requirements is advisable. There isn’t a legal requirement to do so beyond hire and reward insurance and basic vehicle insurance but not having sufficient cover for the classes of goods you are transporting could be regretted. Overall, courier insurance provides couriers with cover:
– If the goods they are couriering are damaged anywhere from the point of collection to the point of delivery.
– If the goods are damaged in the back of the van or car even if there hasn’t been a road accident.
– If items are stolen, whether they are outside of the vehicle or not at the point at which they are taken.
– If certain time-sensitive deliveries are not made on time through no fault of the driver.
Of course, courier insurance policies differ from insurance company to insurance company, so the way in which cover is provided will also necessarily differ from policy to policy.