Courier Insurance 101
Couriers deliver messages, packages, letters and other parcels to individuals, businesses and organizations. They may work for themselves, or they may have an employer like Amazon or DHL.
In either situation, it’s important to ensure that you have the right coverage to cover risks and liabilities. Courier insurance can help you do that.
What is Courier Insurance?
Courier insurance is a type of business insurance that protects delivery drivers and courier operations. Depending on the level of coverage, it may protect against liability, damages and injuries.
A comprehensive courier insurance policy can protect against:
- Damaged or lost cargo
- Motor vehicle accidents
- Employee injuries
Comprehensive coverage will help protect against third-party claims that can potentially bankrupt your company.
Why Do You Need Insurance Coverage For Your Courier Service?
If you make deliveries or run a courier business with employees, you need courier insurance. Like any other business, couriers face a variety of risks, including:
Couriers do their best to handle goods and packages with care, but sometimes, accidents happen. Even when transported carefully and placed into the recipient’s hands, the item may not have been packaged properly or there may have been other issues that led to damage.
When goods arrive damaged, the customer will likely take action against the courier for the loss. Having proper insurance coverage will protect your business in situations like this.
Failure to Deliver on Time
Customers expect deliveries to be on time, especially if it’s a business. Failure to uphold your promised delivery time can not only impact your reputation, but also impact your finances, particularly if you offer your customers express shipping options.
Even if claims from customers do end up in your favor, they can still eat up your time and resources.
Accidents and Injuries
Couriers spend the majority of their time on the road, which means there’s an increased risk of accidents and injuries. Accidents can put your employees and vehicles out of commission. They can also make you potentially liable for injuries related to the accident.
Whether you work independently or for an employer, it’s important to make sure that you have comprehensive commercial auto insurance coverage.
What Type of Insurance Does a Courier Need?
Couriers need insurance to cover potential liabilities and risks, and a variety of coverages are available. Standard courier insurance policies will provide basic coverage, but you can also purchase additional coverage that may cover more risks.
General liability coverage provides protection against third-party claims, including:
- Property damage
- Bodily injury
- Personal injury
- Advertising injury
- Copyright infringement
- Medical expenses related to accidents and injuries
- Court costs, settlements and judgments for covered claims
Without proper liability coverage, you or your courier business would be responsible for paying these claims out of pocket.
There are some things that general liability won’t cover, such as:
- Employee injuries or illnesses. You will need workers’ compensation to cover these types of things.
- Damage to your own property. Most policies will only cover third-party damage. To cover damage to your own property, you will need commercial property insurance. Couriers may not necessarily need to worry about this, especially since the business is primarily mobile.
- Errors. If you make a critical mistake with your business processes, general liability won’t help. You will need professional liability insurance to cover your legal costs if you’re sued for an error.
- Purposeful, illegal wrongdoing by you or your employees.
Vehicles used for commercial purposes must have commercial auto insurance. This provides insurance coverage for drivers operating vehicles for business purposes.
A variety of vehicles can be covered with a commercial auto policy, including:
- Work vans
- Box trucks
- Food trucks
- Utility trucks
Any type of vehicle that is used for commercial purposes will need to be covered by a commercial auto insurance policy.
Commercial auto insurance will cover:
- Property damage liability
- Bodily injury liability
- Medical payments
- Combined single limit
- Uninsured motorist
- Collision coverage
If you have employees, you will likely need workers compensation insurance. In most states, it’s required by law.
Workers’ compensation will cover:
- Wage replacement
- Vocational rehabilitation
- Medical treatment
Cargo insurance protects cargo. It covers damage, physical loss and theft of goods being transported while in transit.
Delivery Truck Insurance
Many couriers purchase delivery truck insurance, or box truck insurance. Box truck policies often include a variety of basic coverages, like:
- Physical damage
- Non-trucking liability
If you operate a truck as a courier, box truck coverage may be a necessity.
Additional Commercial Courier Service Coverage Options
In addition to the coverage options above, you can also purchase optional insurance that provides more protection:
Couriers break down from time to time – it happens. A tire goes flat, or a mechanical failure stops drivers dead in their tracks. But when your drivers (or you) are stuck on the side of the road, this can delay deliveries. Breakdown coverage provides protection for this type of situation.
If you’re unsure of what types of coverage you need, consider working with an insurance broker. A broker or agent with experience in courier insurance will understand your risks and liabilities and can help fill the gaps in your insurance policy.
Commercial Umbrella Insurance
A commercial umbrella insurance policy will cover claims that exceed your policy’s limit. If a claim is $200,000, but your current policy’s limit is $150,000, your umbrella policy would cover the $50,000 gap in your coverage.
How Much Does Courier Insurance Cost?
The cost of courier insurance will largely depend on your policy, your coverage limits, your location and other factors, like the types of deliveries you make.
However, for the average cost of courier insurance with $1 million/$2 million general liability, the cost ranges from $47 to $69 per month.
Keep in mind that this is just an average range. You may need more coverage or want a higher policy limit, which will increase the cost.
Courier insurance is a necessity if you work as a courier or run a courier business. It protects you from liabilities and risks that could potentially bankrupt your business.