Do I need Courier Insurance?

Last updated: August 2023  | Estimated Reading Time: 3 minutes

Tailored courier insurance policies

The same as the goods that you move around, courier insurance policies come in all shapes and sizes to suit the range of customer requirements. Each business will have unique features, maybe they transport dangerous or mega expensive goods. In these extreme cases, a standard courier policy would not be sufficient in terms of cover. The premium amount will be much higher to reflect that added risk taken by the underwriter. Indeed, you may even find it impossible to get insurance if you are deemed too high a risk.

The reverse is also true, maybe you need food delivery insurance, in which case the premium increase will be much lower than for delivering precious items 

If you have multiple vans, you may find that courier fleet insurance can provide savings compared to taking out individual courier polices for each vehicle type.

Your standard vehicle policy may provide limited cover

In the UK, you must have the correct motor insurance in order to drive your vehicle on the UK roads. When you work as a courier delivery third-party goods, you will a special insurance called hire & reward insurance.  If the goods are valuable you may consider adding cover classed as 'carriage of goods' also referred to as GIT insurance. Whilst hire and reward insurance is a legal requirement, goods in transit cover is optional.

Standard car insurance can sometimes provide a very limited cover for carriage of your own goods, but is not really adequate for a full-time business. However, do check your with your insurance provider to see what way you are currently covered if you decide to provide a delivery of goods service.

Higher excess than standard car cover to reflect added risk

Very much like normal car insurance, courier insurance falls into three main types of cover which are third party only, third-party fire and theft, and fully comprehensive. Each category will come with an excess similar to standard car insurance. The difference with courier insurance is that the excess can be very much higher. If necessary, you could consider taking out a separate policy to cover the excess. A better approach is to focus on improving driving standards and thus lower your risks.

It is a legal requirement to have car insurance. You should not assume that your standard car insurance will cover you for operating a courier service. You will need to contact your broker to advise them of any change of use. In turn, they will change the policy to include hire for reward use, but the premium will be increased. If you drive with improper insurance, you will get penalty points equivalent to driving without insurance. You will then be in a position of searching for car insurance for drivers with points on their licence, which will work more expensive.

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