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From the risks of the road to the dangers of transporting fragile goods, there are times when you might be thankful to have courier insurance in place. And you might not have a choice anyway. When it comes to carriage of goods for hire and reward insurance – it is a legal requirement for all couriers.
What is courier insurance?
Before getting into courier insurance, we should clarify what a courier actually is. A courier delivers goods that aren’t their own, from one location to another. This could be parcels, food, furniture or other materials, including for companies such as Amazon, Uber and Deliveroo.
A comprehensive courier insurance policy, then, needs to reflect the risks associated with these activities, including being on the road more frequently than most drivers. It will also differ depending on whether you are classed as self-employed, or covered by your employer’s insurance.
» MORE: How to start a courier business
Carriage of goods for hire and reward insurance
A huge part of getting courier insurance is securing the right insurance for your vehicle, be it a van, car, motorcycle or moped. It is slightly different from basic business car insurance or van insurance, as you are legally required to have hire and reward insurance.
Carriage of goods for hire and reward insurance is what allows you to collect and deliver goods using an on-road vehicle in exchange for money. This is regardless of whether you transport parcels, food, furniture or, as a taxi driver, people. It is sometimes also known as ‘courier insurance’, ‘courier van insurance’, or ‘courier car insurance’, though these terms can also cover a wider range of policies.
You would then also select the level of protection you want for your vehicle, choosing from third party only, third party, fire and theft, or comprehensive cover.
Before taking out a hire and reward insurance policy, you should check to see if you are covered by your employer.
» MORE: Compare business insurance
Goods in transit insurance
Goods in transit insurance is another important consideration for couriers, even if some providers don’t include it as standard. This protects you if the goods you are carrying are damaged, lost or stolen in transit, and will cover the legal fees and compensation costs of a claim made against you.
Courier public liability insurance
Courier public liability insurance, on the other hand, is designed to protect you if you cause injury or property damage (but not to the goods in transit) to a member of the public. This includes your clients and customers.
» MORE: Public liability insurance explained
Other types of courier insurance
If you use specific equipment during your job, such as a trolley to move goods, then you may also want tools and equipment insurance. This will cover the costs if your equipment is lost, stolen or damaged.
If you employ anyone who isn’t a member of your family or based abroad for your courier business, you are also legally required to have employers’ liability insurance.
And, given the dangers of whizzing from location to location, you may also want to consider a personal accident insurance policy. This can cover lost income and medical costs if you suffer an injury or were to die, on the job or elsewhere.
Do I need courier insurance?
Regardless of the vehicle you drive, as a courier you are legally required to have carriage of goods for hire and reward insurance.
If you are a furniture delivery driver, for example, your normal car insurance isn’t valid. So if you had a crash while delivering someone’s sofa, you wouldn’t be covered unless you had hire and reward insurance. If you did, on the other hand, it would pay for the cost of the damage to your vehicle.
The only other type of business insurance that is required by law is employers’ liability insurance. Say, for example, a heavy box falls from the van and fractures the wrist of one of your employees – employers’ liability insurance would pay for the compensation they are owed.
Although other forms of business insurance might not be legal requirements, this doesn’t mean you shouldn’t consider making them part of your courier insurance policy.
For example, if you were to smash the TV you are transporting en route to the delivery address, goods in transit insurance would pay for the compensation costs. The same is true if, as you are paying for petrol, someone steals the video game console you are delivering from the back of your van.
If you dropped a piece of furniture on your customer’s foot when taking it into their house, breaking their big toe in the process, public liability insurance would pay for the compensation costs and legal fees if a claim was made against you. Similarly, if you were to scratch your client’s car while carrying their TV, public liability insurance would cover that too.
Insurance is there to help protect you as well. If your delivery trolley is stolen while you are inside a customer’s home, tool and equipment insurance can help pay to get a new one.
Or if you yourself were to suffer an injury that meant you were unable to work, personal accident cover can compensate you for your lost income.
» MORE: Do I need business insurance?
Does courier insurance cover any vehicle?
Courier insurance should cover any vehicle that is appropriate for what is classed as courier deliveries. This may include vans, cars, motorcycles, scooters and mopeds. Which vehicle you drive may affect the cost of your premium.
However, courier insurance would not be appropriate for the haulage work carried out by larger vehicles, such as HGVs. You would instead need haulage insurance.
What does courier insurance cover?
Below we detail what policies are typically included in courier insurance, and what might not be included in your package.
Broadly speaking, the following policies can be found under the courier insurance umbrella:
- hire and reward insurance
- goods in transit insurance
- public liability insurance
- employers’ liability insurance
- tools and equipment insurance
- personal accident cover
What is usually not included in courier insurance?
As mentioned, what comes under a standard courier insurance policy will vary from provider to provider. For example, some may require you to add on goods in transit insurance as an extra.
Other than that, what is included in your courier insurance is determined by what you choose to pay for. So if you don’t include public liability insurance in your policy, and you damage a client’s car when making your delivery, your courier insurance policy wouldn’t pay for the related costs.
How much does courier insurance cost?
The price of courier insurance will vary depending on the specifics of your job. This may include:
- the number of policies you choose to take out
- the level of coverage you want from each policy
- the type of vehicle you drive
- how many employees you have
- where you are based
- how many years of experience you have as a courier
- whether you are self-employed or a limited company
How to choose the best courier insurance policy for you
Couriering comes in many different forms. This means courier insurance does as well. It is wise to research the risks associated with your specific job – whether you’re delivering food, furniture, electronics or other goods – to help design your policy package.
You should also check what your employer already covers you for, to make sure you don’t take out a policy unnecessarily.
» MORE: Compare business insurance
Courier Insurance FAQs
There are two types of business insurance that are legal requirements for couriers: hire and reward insurance, and employers’ liability insurance.
Every type of courier will need hire and reward insurance for their vehicle. You will only need employers’ liability insurance, however, if you have employees who aren’t family members or who are based abroad.
Yet just because you aren’t legally mandated to have other types of insurance doesn’t mean they aren’t recommended. This includes goods in transit insurance and public liability insurance.
There are a lot of variables that affect your courier insurance that could potentially result in your premium becoming more expensive. This can include the number of unplanned locations you visit, your delivery radius, and where your vehicle is left overnight.
Due to the number of hours couriers spend on the road, they are also potentially seen as a higher risk from the perspective of the insurer.
Goods in transit insurance covers the items you are delivering, regardless of whether that is food, furniture, electronics or something else.
Courier insurance, on the other hand, refers to the wider selection of policies you need as a courier. It is often specifically referring to courier vehicle hire and reward insurance, which is legally required to deliver goods on the road.
Although couriers and haulage drivers both require carriage of goods for hire and reward insurance, they may need different kinds of cover based on what they deliver, and the vehicle they drive.
Couriers tend to make multiple one-off deliveries to a number of locations, often in the same area. Haulage drivers, on the other hand, tend to make longer journeys to pre-planned locations on a regular basis.
These differences will be reflected in the level of cover available for each profession.
While you are not legally required to take out a goods in transit insurance policy, it is worth considering. If the item you are delivering is lost, stolen or damaged during its journey, and you don’t have goods in transit insurance, you may be liable for the costs.
The size of your courier insurance policy’s excess – that is, the amount you agree to pay at the start of a claim you make – will be determined by a number of factors. These include:
- the policy you are claiming on
- the size of your insurer’s compulsory excess
- whether you want to pay any voluntary excess (doing so can reduce your premium)
It is not guaranteed that your courier insurance policy will cover public liability insurance, however some providers will include it as standard.
If you run your courier business out of a dedicated business premises, you may want to look into business buildings and contents insurance. These can be bought separately and will cover both the building itself, and the contents found inside.
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