Do You Need Parcel Delivery Insurance?
Parcel delivery insurance is probably needed for anyone moving goods from one place to another. However, even if the courier’s employer provides some sort of insurance, it is usually very basic and often only protects third parties, rather than the driver themselves.
Regular vehicle insurance is not adequate if using a car or van for business use. The driver may be essentially driving uninsured as providers might not honour claims made while using the vehicle to make a living. (Read more about this in the NimbleFins courier insurance guide.)
As mentioned above, some companies such as Deliveroo, Uber, or some smaller firms may provide some protection, so a driver needs to work out what they are and aren’t covered for. If the employer does provide some insurance, it may just be as minimal as covering injury or damage to third parties, rather than any harm the driver or their vehicle may suffer.
Who needs parcel delivery insurance?
It is not only van drivers who need parcel delivery insurance. Companies such as Deliveroo, Uber and Amazon have seen a huge rise in members of the public becoming so-called hire and reward drivers using their domestic car, motorbike or bicycle for work. In an insurer’s eyes, non-van driving couriers are even more at risk of falling victim to an accident and can be more expensive to cover. But it also means they are putting themselves and their finances at risk without adequate safeguarding.
What insurance do I need for parcel delivery?
When working out how much insurance a courier may need, it’s important to find out how much their employer is covering, if anything.
Remember, driving uninsured is a crime. At the minimum, a courier needs third-party vehicle insurance, but this needs to be specifically courier insurance. Regular car insurance for social, domestic and pleasure purposes is not adequate and will usually be void if the incident was work-related.
Some – but not all – employers will provide third party coverage. But this does not protect the driver or their vehicle.
In this instance, if third party insurance is all the courier wants, then they may not wish to buy another policy. But they must note their car, the goods inside and they themselves are not protected in any way.
Other types of insurance for a courier are third party, fire and theft, and comprehensive.
Third party, fire, and theft cover third party and damage caused by fire or theft only. If in a crash, the courier’s vehicle and themselves will not be protected by their insurance policy, even if the incident was not their fault.
Comprehensive parcel delivery insurance provides cover for all of the above, as well as any other incident that damages the vehicle or driver, such as a cracked windscreen, medical expenses and personal belongings. In all policies, there are exclusions, for example, scratches, so read the small print.
Courier insurance is divided into different policies for van, car or bicycle and motorbike insurance. Courier van insurance is usually cheaper than car insurance as insurers, rightly or wrongly, assume a van driver will be driving to and from depots with adequate parking rather than the side of the road. On the other hand, car and motorbike couriers are more likely to be doing quick drop offs during unsociable hours, driving on routes unfamiliar to them, so they are deemed more at risk of an accident.
Other types of insurance add-ons for couriers to consider:
Goods in transit insurance: If transporting expensive items that the employer won’t cover, this optional extra covers damage to the cargo. Some high-value goods such as fine art are excluded in some policies, so always read the small print.
Breakdown recovery: This optional extra is much the same as domestic car insurance and offers roadside recovery and sometimes a courtesy vehicle to get the driver back on the road.
EU/international insurance: If driving goods abroad, special insurance is needed to cover the courier and vehicle outside the UK.
Fleet insurance: If insuring more than one vehicle, it usually works out cheaper to do them all the same, under the same provider.
Hauliers’ insurance: If the delivery of items usually takes the courier more than two hours to complete, it is wise to look into hauliers insurance for long-distance driving.
Public liability insurance: This is not specific to couriers but protects a worker or business from claims if a customer or their property is injured or damaged.
Employers’ liability insurance: If the courier expands and has people working for them, they will probably need employers’ liability insurance. This funds compensation claims, damages and legal costs if the employer’s worker is injured or falls ill due to their work. It’s a legal requirement for employers to have this insurance for most workers, but there are some exceptions who do not need to be protected.
Where to get parcel delivery insurance?
Parcel delivery insurance is more specialist, so not all car insurance companies will provide it. But it’s worth a courier asking their current personal car insurance provider if they will update their policy. This may work out cheaper than buying two separate policies with different providers.
However, this is not always the case, so comparing prices online is a good idea.
Some personal car insurance providers will invalidate a policy if the driver then starts using their vehicle for deliveries.
There are also some specialist courier insurance providers on the market, such as Zego, Quote Detective and Principal Insurance. Plus, sites like NimbleFins, MoneySuperMarket and QuoteZone offer courier insurance comparison functionality.