In 2012 about 1.8 million people were employed in UK logistics, with about 8% (144,000) self-employed. The online retail market was already described as “booming” pre-pandemic, suggesting the last 18 months may well be described as “nuclear”. For these reasons, it’s quite easy to become a courier. However, because there is high demand and the barriers to entry are very low, it is easy to be unprepared.
Many people imagine that because they have the time, the inclination and the transport, they can be couriers, without giving a thought to the insurance implications. For clarity, the term “courier” doesn’t include food & takeaway delivery drivers. Most of the same considerations apply but are easier to overcome if you deliver only food & takeaway, especially on a part-time basis.
Employed couriers who are provided with a car or van by the company have little to worry about, beyond meeting their daily delivery target. However, self-employed couriers or employed couriers providing their own vehicle need vehicle insurance.
Car or motorbike policies usually provide for only social, domestic & pleasure (SDP) use, possibly with commuting to and from a regular place of employment. The commuting clause definitely doesn’t cover courier deliveries. Most of the big courier firms offer top-up cover to drivers supplying their own vehicles, chargeable on the number of days worked.
Otherwise, arrange for vehicle use to be extended to cover courier work for hire or reward. Some insurers won’t extend their policies and won’t allow policyholders to arrange top-up cover from elsewhere. In such a case, you’ll need to find a new insurer. Both employers and drivers have duties under the Road Traffic Acts to ensure that vehicles are insured. Failure to do so may invalidate any domestic policy either for a particular incident or from inception, leaving the driver exposed to potentially ruinous claims.
On the other hand, bicycle couriers thrive in cities and bicycles don’t require to be insured. But, as courier bikes are often worth as much as a small car, it would be foolish not to insure a valuable asset that you rely on for work. Get a policy that includes third party liability cover for any damage or injury caused to others whilst using the bike for work.
In February 2020 uninsured cyclist Rob Hazeldean settled a claim from a pedestrian who stepped out into his path whilst concentrating on her mobile phone. A court found them equally to blame, but only the pedestrian claimed. She accepted £4,300 but her legal costs were £30,000 and the cyclist’s own costs were £25,000. A GoFundMe campaign raised enough to leave the cyclist “only” £3,000 out of pocket and saved him from bankruptcy. These figures don’t include the damaged bike, or the cyclist’s own injuries and loss of earnings. The accident was in 2015, so the cyclist had 5 years of stress and uncertainty because he wasn’t insured.
Cyclists and motorcyclists should also ensure clothing and accessories are used in association with their bikes. Helmets, cycling gear, waterproofs, motorcycle boots, gauntlets and leathers are all expensive. The Royal Society for the Prevention Accidents (RoSPA) recommends that helmets are replaced after a collision, regardless of visible damage. Courier boxes or bags, satnav or cycle computers could be regarded as modifications and should be declared to insurers for that reason, but also to be covered against theft, loss or damage.
Likewise, if your vehicle has livery, sign-writing or vinyl wraps, the insurers should be told. Heavy-duty chains & padlocks should also be mentioned for inclusion in cover, and as reassurance about security. Don’t forget to use them.
Insurers may require a tracker or immobiliser to be fitted to motorcycles, vans or even valuable bikes. In London, there has been a recent spate of thefts of high-end bikes by machete-wielding gangs ramming riders before making off with their bikes. One report mentioned theft of a bike worth £5,700.
Private car policies often include breakdown cover as an extra, but commercial policies are unlikely to have this perk. Separate breakdown cover with the likes of the AA, RAC or Green Flag would be wise if you rely on a vehicle for work.
Couriers rely heavily on mobile phones to stay in touch with “base” and customers and the phone may run the delivery tracking app. Damage, loss or theft of a phone is a traumatic life event these days and a Mobile Phone policy can ensure same or next day replacement. Make sure to have Contacts and other important apps and data backed up to the cloud or off the phone.
Once a courier accepts an item for delivery he has responsibility for it. This liability can be covered with a Goods In Transit policy. Be sure to check the policy for any limits on single items or total value carried, and for any exclusions on the type of goods carried. Armed with this you will have to check with your customers whether items are fragile or valuable. Your terms & conditions of carriage should make it clear to customers if there are any limits or exclusions. There will probably be an excess payable on claims.
Whilst your vehicle insurance includes third party liability cover for any road traffic accidents, couriers spend a lot of time in customers’ homes, gardens or business premises. A separate Public Liability insurance will cover your liability for any damage or injury you cause other than in relation to your vehicle.
As a self-employed person, you won’t get sick pay if you fall ill or suffer an accident that prevents you from working. This can be covered by a Sickness & Personal Accident policy. There is usually an excess of 1 or 2 weeks before benefit payments kick in, but most policies pay out for up to 2 years or to age 70. If being a courier is a “side hustle”, then a personal accident policy may be overkill, but if it’s your main source of income, it could be money well spent.
Most couriers are employees or self-employed sole traders, but if you have staff of any kind, even volunteers, there is a statutory requirement to have Employers’ Liability (EL) insurance to meet any claims made against you by staff for injury or sickness arising out of their employment. There are exemptions for family members you employ or staff based abroad.
Failure to have EL insurance attracts a daily fine of £2,500. You must display the current certificate of EL insurance prominently in your premises as evidence of cover. In addition, you must retain expired certificates for 40 years. This is to overcome difficulties in establishing insurance history in the case of historic claims such as exposure to noise or asbestos.
The chances are slim of finding all these covers in a single policy, but many insurers offer courier packages, whilst some policies are available only from a small number of specialist insurers.
Call hubb today to discuss your requirements.