Are you considering becoming a courier? It could be a wise choice!
Couriers are constantly in demand. It’s one of the few business areas that grew during the coronavirus pandemic, with drivers providing support for people in isolation by delivering essential supplies and goods.
The shift to online retail is likely to be permanent, and it means even more opportunities for couriers in the future.
Before you get behind the wheel, though, you need to have the right insurance in place. Our guide explains:
- The types of courier insurance
- Goods in transit cover
- Liability cover
- Courier insurance costs
- How to get a courier insurance quote
What insurance do I need to deliver parcels?
To deliver parcels, first of all, you’ll need a van big enough to pick up a full load and deliver to multiple locations. You then need to insure your van for courier use, known as hire and reward van insurance.
If you’re self-employed and only have one van to cover, you need courier van insurance. This is similar to a commercial van insurance policy but is specially designed to cover courier risks.
If you own a courier business and have three or more vans to insure, courier fleet insurance is typically cheaper and easier to manage.
Remember that you are legally required to have the right insurance for your vehicle(s). By law, you either need a courier van policy or courier fleet cover.
What level of courier van insurance cover do I need?
Like private car or commercial van policies, courier insurance for vans offers three levels of protection:
- Third-party only – Covers against injury or damage to third-party vehicles or property only.
- Third-party fire and theft – In addition to the above, it covers fire damage to your vehicle and provides theft insurance.
- Comprehensive – Covers damage to your vehicle as well as all the above.
The minimum legal requirement is third-party only cover. However, if a van is your livelihood, you may decide comprehensive cover is the best option. Without comprehensive cover, you will pay the cost of any damage to your vehicle, including replacement, if it is written off.
If you have a fleet policy, you can select different cover levels for selected vehicles. In doing so, you will help to save money on courier fleet insurance.
Can I insure my van for business use?
Taking out a commercial van insurance policy or adding business use to a standard van policy is not sufficient if you work as a courier. You need a courier van insurance policy by law.
If you are involved in an accident and don’t have a courier policy covering hire and reward, your insurance could be invalid. You also don’t get goods in transit cover with a standard van policy.
If you are in any doubt about purchasing insurance, please call us for advice.
Do I need courier or haulage insurance?
Couriers typically deliver parcels, packages and newspapers. You will pick these up from a depot and deliver them to multiple addresses. Most of this work is undertaken in vans of less than 7.5 tonnes gross vehicle weight — therefore, you don’t need a separate driving licence classification to be a courier.
Haulage involves picking up and delivering items to a single destination over a long distance. As items are often bulky, you will use a larger van or lorry. This type of work requires haulage (or HGV) insurance. You may also need a separate classification on your driving licence to be a haulier.
Couriers do not deliver takeaway food or furniture — these require separate insurance.
For additional courier cover, you might also consider:
- Cover for goods in transit
- Public liability insurance
- Employers’ liability insurance
- Business premises insurance
Goods in transit courier insurance
While courier insurance covers your business van/vehicle, goods in transit insurance protects items being transported and delivered.
Goods in transit cover typically offers up to £50,000 worth of protection for any single claim. The more vehicles you have, the more valuable this cover becomes.
Do I need goods in transit cover too?
You don’t have to purchase goods in transit insurance by law, but it is recommended to take out cover for transported cargo.
Consider the value of goods in your van and the risk of these items either becoming damaged in transit, stolen, or lost. If you can’t cover the cost of these claims, then goods in transit insurance is a good idea.
It’s also worth considering that many businesses and local authorities require you to have goods in transit cover. Without it, they won’t use your services. It’s yet another reason to add this cover to your courier insurance policy.
Should I buy courier insurance and goods in transit insurance separately?
Some insurers used to package courier and goods in transit insurance covers together, but this is rare.
However, it still makes sense to buy policies from the same insurance broker, as it means you have one renewal date and can budget to pay for the covers together. By taking advantage of any finance options available, you can spread the cost, making insurance more affordable.
Public and Employer’s liability insurance
Employer’s liability offers cover should your employees claim alleged injury against you. Insurance is available for legal fees and the cost of any damages payable, typically up to a maximum of either £5m or £10m.
Public liability insurance covers you against claims made from members of the public. Claim limits are the same as employers’ liability.
Do I need to have liability insurance?
If you employ staff, then employers’ liability cover is a legal requirement. Public liability cover is not legally required; however, it is critical for couriers. Like employers’ liability, it can cover claims made by the public of injury or damage to people/property. As a courier, you’re in contact with people all the time, so public liability insurance can prove invaluable.
Public liability and employers’ liability are often packaged together to save money, but you can buy them separately. Costs start at around £150+IPT (insurance premium tax). For the level of cover available, this could prove a small price to pay.
Business premises insurance
If you run a courier depot, you may also need cover for your business premises.
How much does courier insurance cost?
For a single courier van, policies start from as little as £86.33, including insurance premium tax. Goods in transit insurance typically costs around £200 per year for a single policy*.
However, the cost of insurance can vary greatly depending on several factors that include:
- Your location
- The distances you travel to make deliveries
- The age of the driver
- Driver experience, including any motoring convictions
- Claims made previously
- Which level of cover you have – third-party, third-party fire and theft, or comprehensive
- The type of vehicle(s) you have
- The number of vehicle(s) you have
The cost of a courier fleet policy varies depending on the number of vehicles and drivers included. With Bollington, you can specify the installation of telematics – including black box, cameras and other sensors – to help reduce the risks involved. These can bring the cost of cover down, resulting in cheaper insurance.
How do I get a courier insurance quote?
Whatever your circumstances, our expert advisers can help you decide on the right cover. As an established courier insurance broker operating since 1973, we have access to a range of insurers who offer competitive quotes.
To insure a single courier van, you can request a personalised quote online, or call us on 01625 854922.
For courier fleet insurance, fill in your details to request a quote here, or call 01625 348789.
Whether it’s a single van or a fleet of vehicles you wish to insure, our specialists can help you.
*prices correct as of April 2021