What Insurance Do I Need for Courier Work?
To operate as a courier, you may need to take out certain types of insurance, depending on the services you provide. Is your courier business fully covered?
Couriers are legally obligated to acquire certain forms of coverage. Demand for couriers is growing in tandem with how many people are looking to take up the job. This means it’s important that everyone along the supply chain understands what insurance is required for everything to run smoothly.
Public liability insurance
Couriers deal with members of the public day in, day out, so there’s always a small risk you could injure someone or accidentally damage property whilst going about your business.
If a member of the public claims against you, things can quickly add up. As well as compensation for the injury, the claim will also cover additional expenses incurred as a result of said injury, not to mention legal costs and loss of wages.
Public liability insurance protects you against such claims. Your provider will also defend your claims, meaning you won’t become bogged down in the paperwork and will instead be able to continue focusing on your business.
Employer’s liability insurance
Although most couriers operate on a self-employed basis, if you run a courier service and have employees of your own then you must obtain employer’s liability insurance on top of your standard business insurance. This applies even if your workforce works only on a temporary or casual basis.
Employer’s liability insurance covers compensation claims in a manner similar to public liability insurance—but the key difference is that it covers you for claims made by employees, not members of the public.
Whether you use a car, van or motorcycle for your courier service, you are legally required to obtain motor insurance. This covers you if you cause an accident involving your vehicle, leading to injury or damage to property. Comprehensive motor insurance also covers damage to your vehicle.
If you intend to use your vehicle for courier services, you must inform your insurer, as most standard motor insurance policies don’t extend to business use. You will probably incur a premium to remove the business use exclusion.
This also applies to any employees using their own cars, so the business should ask for evidence that they have notified their insurer.
Goods in transit insurance
As a courier, you are responsible for the loss or theft of another person’s property whilst it is in your possession. Goods in transit insurance protects you if this occurs.
Goods in transit insurance policies usually have limits on the maximum value per item, as well as on the maximum total value of the consignment. Ensure these limits will cover your consignments in order to avoid under insurance in the event of a loss.
Light haulier insurance
If you are a courier making a small number of prearranged deliveries per day, light haulier insurance can save you money. Even if you operate alone, you should make sure you always have a legitimate form of cover, as courier companies seeking subcontract work will be on the lookout for this.
Courier van insurance
If the van you are driving for your courier service is lost, damaged or stolen—or if you cause damage whilst driving it—courier van insurance can help cover the cost of the goods you’re transporting if they are damaged in the incident.
Courier van insurance is different from light haulier insurance in that the former applies to drivers carrying out multiple deliveries in one area, whereas light haulier insurance is preferable for drivers making longer journeys for only a handful of larger drop-offs.
Courier van insurance covers the cost of third-party vehicles and their property, and can also cover your own vehicle, depending on what level of cover you have taken out. You will need to inform your insurer if you plan on carrying goods in your van, as well as the nature of the goods. This will ensure your van is comprehensively covered for business delivery trips.
There are three levels of courier van insurance:
- Third-party-only cover is the minimum level of cover required for you to drive your van. It covers the cost of damage to property and other vehicles, but not to your own.
- Third-party, fire and theft (TPFT) cover includes the benefits of the above mentioned third-party-only cover, and also covers damage caused by lightning, fire, self-ignition, explosion, theft and attempted theft.
- Comprehensive cover extends to damage to your vehicle caused by you or another road user. It also covers the cost of fire damage to your vehicle, as well as if your van is stolen. Finally, comprehensive courier van insurance covers damage to property and other vehicles caused by your driving.
And finally, remember that being caught driving uninsured risks confiscation of your van, as well as being landed with a £300 fixed penalty and six points on your licence.
If you run a large enough operation that you have other couriers working under you, you may be able to save money by taking out fleet insurance. This cover is generally designed for companies with at least five vehicles. It’s easier and less costly to process than it would be to take an individual policy for each vehicle.
Find the cover that’s right for you
No matter what courier services you provide, it’s vital to identify the correct cover for your business. Take the time to check out the terms and conditions of each quote and policy, and be clear in understanding what you are covered for—as well as what you are not covered for. In doing so, you will protect your business against unexpected losses, comply with legal requirements and secure your company’s prosperity.
Finance Director at NerdWallet UK and business adviser to SME's Nic is spokesperson for small and growing businesses with a strong understanding of the financial needs of business Read more