The courier jobs market is booming as online sales soar and coronavirus accelerates an already growing way of shopping. Parcel delivery driving can be a lucrative way to earn an income or a flexible way to make a bit of extra cash, but it isn’t as simple as just firing up a car and hitting the road. Drivers need to beware of courier insurance responsibilities or face breaking the law.
Courier insurance can be tricky to navigate, with employers sometimes offering some cover but not fully comprehensive policies. In addition, many of the biggest insurance brands don’t even provide it, so drivers can be left wondering where to go. Here are six things parcel delivery drivers should know before starting work to make sure they are properly protected.
- Social, domestic and pleasure vehicle insurance does not cover courier driving, nor does business use or commuting use.
Courier insurance is a specific policy for those using their vehicle to make deliveries. This is because courier driving comes with its own set of risks that are more likely to result in a claim, according to insurance providers.
Courier insurance is much more expensive than standard domestic car insurance and can even be more expensive when covering a car over a van. This is because insurance providers see the majority of van delivery drivers as picking up and dropping off at official depots and potentially less frequently than a car driver going door to door and parking in multiple hazardous spots.
Many popular insurance providers do not offer courier insurance, so the first thing a driver should do is contact them to see if they include a Hire and Reward insurance option. If not, they are unlikely to pay out for an incident, and the driver is essentially travelling uninsured. Furthermore, driving without valid insurance is illegal in the UK, so the driver risk being liable for damages after an incident. They could end up in court, be fined, receive points, and potentially lose their licence.
- The minimum level of courier insurance needed is Hire and Reward insurance with third party only cover.
Hire, and Reward is the act of using a vehicle to deliver people or goods for money. It can cover couriers but also chauffeurs, taxis, hauliers, removal drivers or other delivery drivers.
Hire and Reward insurance comes in three set forms (before looking at any additional extras):
Third party: Covering just other people and their property in the event of an incident.
Third party, fire and theft: Covering other people as well as your vehicle if it is victim to fire or is stolen.
Comprehensive: Covering all of the above, plus the policy holder’s vehicle plus the people and belongings inside.
While third party insurance may sound like the cheapest option, comprehensive can sometimes actually be a better value or even cheaper as insurers assume younger drivers with less experience will take out third party insurance and are more likely to claim.
The driver’s employer may provide some small level of cover, which is usually only third party cover. But always check the terms and conditions of employment.
- There are a few different types of insurance for delivery drivers, but couriers need only one kind.
Courier insurance providers may provide some or all of the following:
- Haulage insurance,
- Carriage of own goods insurance,
- Carriage of goods for hire and reward.
Food and parcel delivery drivers need the third category – hire and reward insurance. Food delivery drivers may need a specific type of hire and reward insurance as they work with strict turnaround times, which may be slightly riskier to cover. They should contact their insurance provider to let them know they are transporting food to check they are still protected.
- Pay As You Go courier insurance can save money but be careful.
Pay As You Go courier insurance is a type of hire and reward policy that sits on top of a driver’s social, domestic and pleasure vehicle insurance. It only covers couriers when they are working, which can be useful for delivery drivers who perhaps do not drive regularly or can’t afford the expensive outlay (annual courier insurance starts at about £1,400).
It usually matches the cover a driver has for their SD&P insurance and can even be synced up to job apps such as Deliveroo, so it kicks in when a worker logs in for their shift.
But this flexibility comes with a warning. Not all SD&P vehicle insurers accept pay as you go hire and reward policies to sit on top of their policy. If this is the case for a delivery driver, they face losing their whole policy protection, so they must check with their provider.
- Courier insurance is not sold by most major UK car insurance providers.
Direct Line, AXA, esure, LV and Hastings are just some of the major insurance providers that do not offer courier insurance; however, Admiral does accept top-up/pay as you go cover.
Unfortunately, comparison websites also do not hold many options, if any, so it may be tricky to find a provider.
Insurance and personal finance experts NimbleFins can hunt out some courier insurance options with their comparison partner QuoteZone.
- Couriers must always check with their social, domestic and pleasure insurance provider for permission to be a delivery driver.
A driver may think their job is done if they top up their SD&P vehicle insurance with a hire and reward policy, but they could be in trouble if they haven’t informed their SD&P provider.
Many major car insurance providers will not accept a top-up policy, and if in an accident – even if it happened when not working – they may reject a claim.
Drivers must contact their insurance providers ahead of time to see what they are and are not covered for and if they need to look elsewhere for their policy. Courier firm Stuart has compiled a list of providers offering courier insurance.