At first glance, becoming a courier seems easy. You just find people who need to move something from one place to another and charge them an appropriate fee for doing that for them.
And there’s more and more people using the services of couriers. People aren’t using motorcycle couriers to move documents around cities as much as they used to now email is pretty much universal, but that’s been replaced by demand from people buying and selling items via the likes of eBay and Gumtree. Self-employed couriers are also in great demand from takeaways looking to get their food to their customers quickly and efficiently.
But whereas there aren’t many hoops to jump through to become a courier, there are a few things that you need to sort out when you start your business. One of those is insurance. You’ll need this to protect your business against unexpected losses and to comply with legal requirements.
So, what insurance does a self-employed courier need?
As a courier, you will be dealing with members of the public each and every day, and this means that there is a risk that you could injure someone or damage their property accidentally. If that happens, a claim for compensation could be made against you.
Claims for compensation can be expensive. As well as the compensation for the injury itself, the claim will also include any additional expenses that the claimant has incurred as a result of their injury, as well as their legal costs and any loss of wages. Even a minor injury could cost £1,000. A broken bone could easily result in a claim for £25,000 and a serious injury could cost hundreds of thousands of pounds.
Public liability insurance protects you against such compensation claims. Your insurer will also defend the claims for you, meaning that you don’t have to deal with endless legal paperwork and can concentrate on running your business instead.
Employer’s liability insurance
Although couriers tend to operate on a self-employed, one-man-band basis, if you have any employees, you’re legally required to have employer’s liability insurance, even if you only employ people on a temporary or casual basis.
Employer’s liability insurance covers compensation claims in the same way that public liability insurance does, although it covers claims made by employees, rather than claims made by members of the public.
Goods in transit insurance
As a courier, you’re responsible for any losses due to damage or theft of other people’s property while that property is in your custody. Goods in transit insurance protects you against such losses.
Goods in transit insurance usually has limits on the maximum value per item and the maximum total value of each consignment. It is important to make sure that the limit is adequate and covers the sort of consignments that you’re carrying, to avoid underinsurance in the event of a loss.
Most couriers will be using a motorcycle, a van or car. You’re legally required to have motor insurance if you use any of these anywhere that the public has access to.
Motor insurance covers you if someone is injured due to an accident involving your vehicle if that accident was your fault. It also covers damage to their property.
If you have comprehensive motor insurance covers, any damage to your vehicle as a result of the accident is covered as well. You can save money by only buying third party, fire and theft motor insurance, but that only covers damage to your vehicle if the damage is caused by fire or theft.
You need to tell your insurer that you will be using your vehicle as a courier, because most standard motor insurance policies exclude business use. There will generally be an additional premium that is payable to remove the business use exclusion.