What is Courier Insurance?

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Courier insurance is a form of Hire & Reward insurance you’ll need if you drive or ride a vehicle to carry other people’s goods and items in return for payment. If you use your vehicle to move something from A to B as a job, you’ll need courier insurance to ensure you’re protected. This article will aim to help you understand courier insurance cost better, compare different types of courier insurance (courier van insurance vs courier car insurance, for example) and help you get the best deal possible.

Here are some of the key points you'll need to know before you purchase courier insurance for your car, van, motorcycle or bike.

Do you need Courier Insurance?

Simply put, if you’re moving goods, materials or passengers from A to B then you’ll need insurance to protect yourself. The type of insurance you need, and the amount you require, will depend on what you’re using your vehicle for.

If you’re working as an independent courier then it’ll be very important to confirm you’re covered to protect yourself against unexpected costs. At an absolute minimum, you're legally required to be covered by third party liability cover - your regular vehicle insurance won't provide this, so if you're going to be working independently then make sure you've purchased this before undertaking any work.

However, if you’ll be working through another company (think Deliveroo, Uber, or perhaps even a local furniture moving service), then it’s important to work out what you’re covered for and what you’re not.

Generally speaking, firms like these typically provide a form of free coverage for damages to third parties (other drivers and vehicles not your own, in the form of public liability) while you're at work, but sometimes not for the courier themselves, and rarely for your vehicle of choice, so if you want to ensure you/your vehicle are fully protected you’ll need a separate policy. Each individual firm will have its own coverages, so make sure you know what you’re protected for.

Types of Coverage

Similar to what you might find with car insurance, there are three levels of cover you can buy to protect the vehicle you use for courier services.

Third-party-only

Third-party-only is the minimum level of coverage required legally to drive your vehicle. It will cover damages to another driver’s vehicle or property, but will not cover your vehicle at all.

  • Example: An accident occurs involving you and another vehicle that you're at fault for - TPO covers damages to the other vehicle but not for yours.

Third-party, fire and theft

TPFT provides all the benefits of T-P-O, but with added protection for damages caused by fire or theft. You still are not covered for damages to your own vehicle caused by an on-road accident, whether yourself or another driver was at fault.

  • Example: Your car is stolen from the street at night.

Comprehensive

Provides all of the benefits of the above, but with the additional benefit of covering you and your vehicle as well as any involved third parties.

  • Example: Your car is damaged when you slide off the road in slippery conditions.

In the table below, you can see what coverage each policy offers you through insurance provider AXA. Our research indicated this was fairly standard across a number of insurance providers.

What's covered?Third PartyThird Party, Fire and TheftComprehensive
Injury to other people or damage to their vehicles or property
Accident recovery cover
93 days’ EU travel
Continued cover while your van is getting serviced or repaired
Minimum cover to legally tow a trailer
Loss or damage to your van caused by fire or theft
Built-in music, navigation and entertainment equipment
Loss or theft of your keys (up to £500)
Guaranteed courtesy van if your van is stolen or damaged
Loss or damage to your van
Broken windows and windscreens
Personal injury to the driver of your van (up to £5000)
Medical expenses (up to £250)
Personal belongings (up to £250)
Cover if you put the wrong fuel in your van

Types of Courier Insurance

  • Courier Van Insurance

You’ll need courier van insurance if you use a van to carry goods or materials in return for payment. Courier van insurances are, generally, designed to protect most types of light haulage work, from couriers to furniture removal. Most policies offer the three levels of cover mentioned above.

  • Courier Car Insurance

Similarly to courier van insurance, cars used for courier services (now a more popular prospect than ever with the rise of tech companies offering paid courier work for small, easy-to-carry deliveries such as food/takeaway or individual packages) require a specific insurance policy. Your standard car insurance policy is unlikely to cover you sufficiently to conduct courier activities, and many service providers will require proof of insurance before allowing you to take jobs.

  • Bicycle and Motorbike Insurance

Those wishing to use a bicycle/motorbike for work purposes will also want to consider policies to help protect themselves against any damages. Most courier ‘app’ companies will provide you with basic on-the-job coverage for injury/public liability (with some even offering sick pay or a one-off payment for paternity/maternity!) but won’t cover your vehicle at all.

  • Food Courier Insurance

Different food delivery services offer different levels of protection when you sign-up to work for them. As a minimum standard, most will provide third-party-only vehicle insurance and a level of public liability insurance. You can find out more about popular food courier services, and the insurances offered, here:

(Optional) Goods in Transit Insurance

The insurances mentioned above will cover your vehicle while it is in use for paid courier services, however some courier van insurances won’t cover the value of your goods in transit, so it’s worth making sure that you’re fully covered. There can be specific exclusions on high value goods such as fine art or jewellery, so check before you buy if you know you’ll be working with these types of goods.

  • Example: you’re carrying a set of expensive mirrors, some of which are damaged while driving. Your client wants you to pay for their replacement.

(Non-courier specific) Public Liability Insurance

Public liability insurance is one of the most common types of business insurance, bought to protect a business financially from the litigation costs and compensation payments that can follow certain types of accidents.

  • Example: while carrying a large item, your vision is impaired and you walk into a member of the public, knocking them over and causing a minor injury.

(Non-courier specific) Employers Liability Insurance

Employers liability insurance covers compensation payments to your current and former employees if they are injured at work or become ill due to their work for your business. In addition, employers liability insurance would cover legal fees associated with defending an employee liability claim.

  • Example: one of your employees trips and falls while making a delivery, and believes insufficient equipment was at fault.

Optional Extras

Breakdown/Accident Recovery

Some providers offer this as an optional extra, some offer it within comprehensive packages, so make sure to double check before buying. Provides you either with the help you need to get your van back on the road, or with a back-up vehicle in case yours is taken out of action longer term.

EU/International Insurance

More relevant for haulage couriers, but if you’re transporting goods across the UK border and into Europe/internationally, you’ll need special insurance to ensure you’re covered while you’re outside of the UK.

Fleet (More than one van)

Fleet policies are, typically, laid out similarly to those designed for individual couriers (comprehensive, TP, TPFT). Primary benefits include discounts and keeping all policies from the same provider (equal levels of coverage, single renewal date).

Haulage (or Hauliers Insurance)

Haulage insurance covers you for the movement of goods across long-distances. You’re likely to be interested in haulage insurance if your work typically takes a number of hours to complete, and generally involves one starting and finishing point.

How much does courier insurance usually cost?

The cost for insurance packages varies depending on which type of insurance you choose - our research found that courier car insurance ranged from £1,300 to £1,700 a year for comprehensive cover or £1,450 to £2,150 for courier van cover for a typical driver profile. Prices vary depending on which additional extras you do/don’t require, and which provider you choose to go with.

During our research we found that many providers consider courier insurance a more “specialist” product than personal car/van insurance, so there may be extra steps before you’re set-up properly and covered.

Below is a visual summary of 3 quotes we received for comprehensive, TPFT and TPO van insurances for a 5 year old Ford Transit. There are some interesting points to note.

Chart showing the average cost of courier insurance in the UK
Comprehensive courier insurance can be cheaper than lower levels of coverage like TPFT and TPO
How Much is Van Courier Insurance in the UK?TPOTPFTComprehensive
Zego£1,450£1,716£1,944
Quote Detective£2,172£2,172£2,372
Principal Insurancen/a£1,847£1,749

Some providers offer TPFT as their minimum courier insurance coverage, and won’t offer a TPO policy. Fully comprehensive coverage can, in some cases, be cheaper than less extensive policies, especially for older and historically safer drivers. A key reason for this is because young (and riskier) drivers typically search for TPO (minimum required) insurance and providers can afford to reward safer drivers for their business.

What to look out for in a courier insurance policy

As with most insurance policies, it’s worth making sure you know what you’re covered and not covered for. Our research found that most providers would charge extra for replacement vehicles, breakdown cover and legal cover in the case of a lawsuit, so keep these things in mind when creating a policy that works for you.

Also make sure to inform your social, domestic & leisure insurance provider (if they’re two separate policies) as soon as possible that you’ve started working as a courier, and the details of your new policy and provider, to avoid any unnecessary risk of them nullifying your policy in the case of an accident. Remember many insurers will happily add on courier/goods in transit insurance, so check with them if you’d like to keep the policy under one provider for convenience sake (but you could get a cheaper deal shopping around elsewhere!)

Common exclusions or conditions

There are many exclusions and conditions that apply to personal vehicle insurance that cross-over with courier insurance regarding security, accidents where you’re not at fault and the value of insurance that will be paid. There are some more courier specific insurance conditions to be aware of, such as trailer coverage (most policies will not cover you for damages or theft incurred to a separate trailer attached to your car or van, so you’ll need to purchase this separately).

If it’s your first time owning and driving a van, your no claims bonus/discount from your car driving history also doesn’t typically carry across, so be prepared to start a fresh no claims for your van driving.

FAQ’s

All vehicle quotes were gathered for a 30-year-old male driver living in North West London, who had been driving for 5+ years with no claims or convictions against his name. In both cases, the driver had never worked as a courier previously (0 months self-employed) with no additional forms of employment.

The van used was a 1.6L 2014 Ford Transit Connect with 71,000 miles. The car used was a 1.8L 2012 Toyota Prius with 48,000 miles. Our research indicated both vehicles were popular choices for van/car couriers.

You may be finding that the insurance you require as a courier is significantly higher than your personal vehicle insurance. There are a number of reasons for this. Firstly, courier drivers tend to drive for long hours, and regularly operate on roads they’re unfamiliar with. If you’re using a van for courier services, larger vehicles also typically fall into higher insurance brackets.

Given that courier insurance is also a business insurance (as opposed to social, domestic & pleasure policies you might be used to for your personal travel), coverages like goods in transit or public liability must also be factored into potential costs.

It can be easier to find cheap courier van insurance if you drive a vehicle that insurers are most familiar, such as:

  • Ford Transit
  • Citroen Belingo
  • Mercedes Sprinter
  • Vauxhall Vivaro

Many methods of reducing your personal car insurance still apply to creating the cheapest courier insurance policy possible (no claims history, clean driving license, paying annually). Paying a larger policy excess (the amount you’ll pay in the event of a claim), fitting an enhanced security/monitoring system (black box, dashboard cam) and parking your vehicle closer to home/in a secure garage will all help to reduce the cost of your courier policy.

If you’re part of a larger courier company with more than one vehicle, you may also be able to sign up to a Fleet Insurance package, which will cover all vehicles under one policy at a lower rate than if you were to insure them with the same provider individually.

Yes—a few insurers offer policies targeted at couriers only intending to work on a short-term basis, however be aware that many insurers will invalidate your social, domestic & pleasure policy if you’re working as a courier—even if you’ve got temporary courier insurance.

Some providers and comparison websites will take into account your no claims bonus from other/previously registered vehicles, however you can only transfer no claims gained through the same type of vehicle (as an example, 5 years of no claims on a car wouldn’t apply to your first van).

The policies can be seperate, however be aware that some personal vehicle insurance providers will invalidate your policy if you haven’t clearly stated you’ll be using your vehicle for both personal and business purposes, irrespective of whether or not you were working at the time of an accident. Some providers will also not consider your insurance valid if you were being protected by a temporary insurance provider (Zego, MCE).

Absolutely, and most personal insurance providers will offer haulage/courier protection that it’s easy to add-on to your existing policy, but it’s worth shopping around too to find the best deal if you don’t mind dealing with two separate policies. As mentioned above, stay wary that some providers won’t cover you if you choose to use a temporary courier insurer like Zego or MCE, irrespective of when your accident occurs, as your policy will become invalid.

  • The market for vans has been popular for much longer, allowing insurers and underwriters to more accurately evaluate risks, costs and driver profiles
  • Van couriers are considerably more likely to collect and offload goods at designated depots, that have appropriate safety measures in place, compared to car couriers who are more likely to park outside a store/restaurant to collect food/goods
  • Van couriers are less likely to drive unsociable, late-night hours to collect goods or make deliveries
Luke Masters

Luke is a freelance research associate. Prior to NimbleFins, he worked at FreshMinds, Investigo and BMW. His work in data analytics, pricing, strategy and business development now help him write business insurance content to support SMEs. Read more on LinkedIn.

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