Business Insurance

What to know before working as a courier

Here are some general points drivers need to know before they begin working as a courier, and some advantages and disadvantages to working on the road.

Drivers looking for a courier job have never had so many options at their fingertips. The development of apps such as Amazon Flex, Yodel, and even in-house couriers such as AO, means it's as simple as logging on and seeing if work is available. Of course there are some aspects a driver must take responsibility for, such as the upkeep of their courier vehicle insurance, but this is a booming industry which doesn't look like it will lose steam any time soon.

Pros

  • Flexibility: Self-employed couriers can decide the hours they work giving huge flexibility if trying to fit work around other commitments. Simply log on to a chosen app and they are available to start working.
  • Chance to earn extra money: Taking advantage of peak periods, national holidays and heat maps, plus learning how to deliver as efficiently as possible, can see a savvy couriers earn much more than the average. Courier company Gophr claims its best performing carriers can make up to £7,500 a month. That said, it's not uncommon for couriers to earn less than they might have hoped, especially when you take into account the hidden costs (see the Cons section). Read tips for earning more as a courier here.
  • No need for a specialist driving licence or vehicle: Unless specified, couriers can use a regular car or van to drop goods, rather than needing a C1 or other driving licence - it's never been easier to be a courier! But drivers must ensure they have the correct courier insurance as domestic or business use insurance is not sufficient.

Cons

  • Can be stressful: There are certain things out of a courier's control such as traffic and breakdowns. Plus busy delivery periods can see carriers take on more parcels than they can handle.
  • No guarantee of work: If not a permanent member of staff, couriers may not always have work available at the times they want to log on. There are clever ways to make more money as a courier, with some listed in the link at the bottom of this page.
  • Hidden costs: The hourly rate or cost per parcel delivered may sound appealing, but couriers must take into account the costs to stay on the road. A bike is the cheapest way to deliver but mostly couriers use cars or vans. Not only do they need to keep up to date with road tax, MOT, servicing and potentially congestion charges, they need specialist courier insurance which is easily more than £1,000. Insurance is one of the most important things a courier needs, and this is explained in more detail below. Self-employed couriers also need to navigate their own income tax and pension contributions.
  • No paid holidays or employee benefits if self-employed: This is different for permanent staff, but self-employed workers are not given paid leave. Of course this agreement also works for their advantage with there being no obligation to work any set day.

General information couriers should know:

  • Couriers need a clean driving licence: Although often fewer than six points is acceptable.
  • There are jobs that are permanent and for the self-employed: Self-employed jobs come with more responsibilities such as insurance.
  • Desirable qualities include: Organisation, good customer service, and being able to lift up to 30kg.
  • Consider your vehicle: If looking to get a new vehicle, look for one that is economical to run with low fuel, tax and insurance costs. Speak to fellow drivers at depots and see if they have any advice.
  • Courier insurance is essential: See below.

Courier insurance:

Domestic or business use insurance is not accepted for couriers and without courier insurance drivers are essentially travelling uninsured and breaking the law.

At the very minimum drivers need third party courier insurance to cover other people and their vehicles. But often comprehensive cover - which safeguards others as well as the driver and their vehicle - is the same price.

Courier insurance is divided into policies for cars, vans, motorcycles and bicycles, with van courier insurance usually coming out cheapest.

Some delivery companies provide some insurance to cover courier driving, which is usually third party, so drivers must check the terms of their employment to see what is needed. Unfortunately courier insurance is much more expensive than regular insurance, because drivers are likely to be out on the road exposed to risks for long stretches of time. Prices start at about £1,400.

There is the option of Pay As You Go courier insurance which sits on top of a driver's domestic car insurance and is activated only when the courier is working. However a lot of car insurance providers do not accept it and a driver could lose their whole protection if they wrongly apply Pay As You Go to their policy. There are add-ons to courier insurance which may be of interest including:

  • Goods in transit insurance,
  • Breakdown recovery,
  • EU/international insurance,
  • Fleet insurance,
  • Hauliers' insurance,
  • Public liability insurance,
  • Employers' liability insurance.

Sources:

Erin Yurday

Erin Yurday is the CEO, Co-founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.

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