There are different types of policy to be aware of and making sure you have the correct one for your operation is critical. Knowing what is courier insurance is not easy with a vast market of differing demands finding the right cover can be complicated. Whether you are a single operator, a courier company, a sub-contractor etc. you will usually need at least three types of insurance.
Firstly there is courier vehicle insurance also known as hire and reward courier insurance. Whether your transport is by car, van, lorry or even motorbike you need vehicle insurance specific to the type of vehicle. For example you can purchase specific car courier insurance, courier bike insurance or motorbike courier insurance for the sort of vehicle you will be using. Any vehicle operating on UK roads legally requires insurance however standard vehicle cover will not make the cut if you are using your vehicle for couriering. If you are using a car or van for business purposes you will need to protect yourself against anything going wrong to avoid repercussions that disrupt your business. For a lot of companies their vehicles are crucial in keeping things running smoothly on a day-to-day basis, so having cover that will mean your business does not come to a standstill if anything were to go wrong is vital.
There are lots of different options available for vehicle insurance and getting good value insurance with all the necessary features is not always an easy task. Your policy should include features such as replacement vehicle, variable excess, breakdown assistance, protected no claims bonus, glass cover etc. It is also important to read the fine details to check there are no exclusions such as no drivers under 25 or restricted types of goods that you can carry and also no hidden extras that you do not need. Some companies will offer packages designed specifically for courier service insurance, which will include the other types of insurance you need. However it is worth shopping around to see if you can obtain a cheaper price purchasing them separately.
Goods in Transit Insurance
Goods in transit insurance for couriers covers the goods being transported for a third party. If there were to be damage to or loss of any goods within the vehicle then goods in transit courier insurance will cover this on behalf of the customer. If you are a courier operation then you may be responsible for delivering many different types of goods. Different GIT insurance will cover different types of goods and some policies will come with exclusions such as hazardous goods, livestock and human remains or goods being transported for a house move. The typical cover will only include parcels, packages, boxes, envelopes and palettes. This is because these things all have a price and if there were to be an accident it is much easier to make a claim when someone somewhere knows the worth of the object. Pay-outs would be a lot less straightforward when having to quote for antiques, perishables or livestock especially in the case of theft as there was no specified original value. Along with medicines, these items are very difficult to put a value on especially when you cannot confirm the condition they were in before the incident.
Your cover may also be affected by the value of your goods. For example if you are transporting goods that would be considered attractive for theft such as electronics the insurance may only cover half of their value. If there is a possibility of you transporting these items then you will need to ensure your insurance does not exclude them. However usually with standard cover that has exclusions you will pay one yearly or monthly cost and this will not vary if you only carry the items in your policy. The price does not vary on the value of the items once you have taken the cover out.
If an unusual situation arises where you suspect you are going to be transporting goods for which you are not covered then you do not necessarily need to turn down the business. You can contact the providers of your policy and request one-off extra coverage or ask the customers to take out insurance themselves. This can be an extra cost but it is not recommended to transport these items without appropriate good in transit insurance for couriers and you will be unable to claim if anything does go wrong and you did not have sufficient cover. This is often the case for people doing a one off house move. House removal courier insurance is available as a separate policy for a greater cost but most insurers will not cover removals on standard courier insurance. If the house move is a one off then van rental with courier insurance is an alternative option.
Goods in Transit cover is not compulsory however if you are looking for work off larger companies such as DPD you will not be offered any work without it. Most of these large companies require a minimum amount of GIT and most insurance brokers will offer you between £10,000- £50,000 worth of cover per vehicle. The company decides how much GIT they will need their couriers to have for example Yodel expects £30,000 and DPD expects £40,000.
You do not legally need GIT but you would be left liable for any goods you were carrying if something were to happen to them and often, not knowing their contents makes this a risky strategy. There is also an excess cost with most companies around £100 but you are not limited to the number of claims you can make. Luckily goods in transit claims are infrequent but most large companies will not use you as a courier if you do not have this cover.
Courier Liability Insurance
Courier liability insurance is necessary to ensure that any member of the public, customer or member of staff is protected at any time. Although we would hope accidents like these are rare you must, by law be protected against them if you have a courier company. Liability insurance is broken down into public and employers. Any courier from a single vehicle to a large corporate courier company will require public liability insurance. However employers’ liability insurance is only needed if you employ members of staff as couriers.
Public Liability Insurance
When working with the public there are always going to be risks that you need to be covered for. For example if there were to be an accident, injury or damage to property or land during a business operation then public liability insurance will come into play. Although these accidents we would hope are going to be few and far between there is always the chance of goods falling out of vehicles, being dropped on the way from the vehicle, damage caused to property by the vehicle etc. These accidents could be very costly to your business (especially when medical bills are involved) if you are not insured for them but this cover is sometimes available as part of a package policy. This insurance only covers claims made by other businesses or by members of the public, not by employees. The insurance will pay for any damage or destruction caused and the legal bills that usually come with such a compensation claim.
Employers’ Liability Insurance
The UK law requires any business employing staff must have employers’ liability insurance. As a business you take responsibility for the health and safety of your employees during work hours. If there is an illness or medical condition that occurred as an accident at work that has resulted in the employee no longer being able to work then your insurance will cover their loss of earnings whilst they are off work. Accidents that occur in the workplace or illnesses that develop due to working conditions are common compensation claims that you will need cover for. The law requires that you be covered for a minimum of £5 million with some policies exceeding this amount. Being without this insurance can be very costly with huge daily fines placed if you cannot produce a valid certificate in the presence of an inspector.
However not everyone will need to take out such cover if you are a single vehicle company with no employees only public liability insurance is needed. Sub-contracted workers are often classified as self-employed so subcontractor companies may not need this type of insurance but this will need to be checked before you operate without it.
Getting the correct forms of insurance is very important in terms of legalities and potential future costs to your business. Although it may seem like a large task finding these different types of insurance that tick all the boxes and are still great value, it is worth taking your time and being thorough. There are cheap ways of doing it sometimes using package deals or for larger companies fleet insurance can save you money. Fleet insurance cover is ideal for large businesses usually that have more than three to five vehicles, this can range up to say 500 or even more for the larger companies. This saves having lots of individual policies for each vehicle and driver so is much easier to deal with.
Package deals are usually available from an insurance brokers so you can keep all your policies under one roof. A standard package would include say £10,000 of goods in transit insurance, £5 million of public liability insurance and £10 million employer liability insurance. However sometimes these packages are negotiable to meet your demands.
If you are planning to courier abroad then you will need to discuss this with your insurer. Some policies will cover taking your vehicle abroad for a restricted amount of time for example 90 days but if you are out of the country for longer than this time period your insurance will be invalid. This can be useful if you wish to deliver or pick up packages from abroad or do a one off house removal.
If you need advice or details on which insurance you need and whether you are going to be covered for the needs of your business then speak to your policy provider or an insurance broker who can tell you what is compulsory and what is included in your policy as well as prices.