Whether you’re starting out as a courier for the first time or looking to renew your courier insurance, you’ll want to know how much your courier insurance should cost.
It isn’t a straightforward calculation and will vary between couriers. Here are the factors that influence the cost of courier insurance:
Vehicle types
Depending on how many vehicles you’re insuring, the types of vehicles they are and whether or not they have had any adaptations will affect the cost of courier insurance. Larger or specialised vehicles like refrigerated vans are likely to cost more than smaller, standard vehicles.
The make, model, age and mileage of a vehicle is also factored into the cost of courier insurance. Newer vehicles with advanced safety features, such as anti-lock brakes, airbags, and GPS tracking, may qualify for lower premiums due to the reduced risk of accidents and theft.
Regular maintenance of the van and its security features is essential. Security systems should be inspected periodically to ensure they are functioning correctly. Additionally, couriers should conduct regular security audits to identify potential vulnerabilities in their procedures or equipment.
Vehicle use
How far and frequently couriers are driving will affect their likelihood of accidents. Long haul driving carries different risks compared to multi-drop in a specific area. Where vehicles are stored overnight can impact courier insurance costs depending on whether the overnight location is safe and secure.
Geographical areas of operation (Goods in Transit insurance)
As well as distance travelled, where you operate influences your courier insurance premium. Urban areas with heavy traffic, higher crime rates and increased likelihood of accidents could lead to higher insurance premiums. Goods in Transit insurance covers you for the transportation of goods and external factors that may affect the risk of accidents, damage or theft.
Value and type of goods transported
The type of items you transport can influence the cost of courier insurance. High value items, such as electronics, jewellery, or pharmaceuticals, generally result in higher premiums due to the increased risk of theft or significant financial loss in the event of damage. Additionally, hazardous materials or perishable goods may require specialised coverage, which can further increase costs.
Couriers dealing with high risk or high value items should expect to pay more for insurance than those transporting low risk, low value goods like documents or non-perishable goods.
Liability Insurance and Goods in Transit Insurance
If you choose to take out additional policies to cover your courier business, the following types of insurance might increase the overall cost of your policy. Extra cover, however, can often provide an extra layer of protection for your vehicles and yourself.
Goods in Transit insurance – covers items transported for damage, theft or loss. Costs will vary according to the value of the goods being carried.
Public Liability insurance – covers legal costs and compensation claims if a third party is injured or their property is damaged because of your actions. If you injure or are responsible for the accidental death of a member of the public, supplier or customer, Public Liability insurance can cover the cost of a compensation claim made against you. Similarly, if you damage their property, for example, break a gate or a wall, this type of cover can provide a good level of financial protection.
Employers’ Liability insurance – this type of insurance is a legal requirement if you employ drivers or other employees. It covers compensation claims made by employees who are injured or become ill as a result of their work. The number of people who work for you and the type of work they do will affect the cost of this type of cover.
Additional coverage
If you opt for additional cover, such as legal expenses insurance or breakdown cover, you could see an increase in your overall insurance costs. While these types of cover provide valuable protection, they can increase the premium and should be considered based on your specific needs and risk exposure.
Excess
Choosing a higher excess (the amount you pay out-of-pocket before the policy covers you) can lower the premium. However, you need to consider whether a higher excess is financially manageable and weigh up potential savings against the risk of having to pay a significant sum if an incident occurs.
Claims and driving history
Drivers who have had few or no claims, and no driving convictions, will benefit from lower courier insurance costs than those with extensive claims histories and driving offences. Drivers with a history of frequent claims, whether they are for accidents, theft or damaged goods, can be viewed by insurers as higher risk, which impacts on premiums.
Insurers might also place additional conditions or exclusions on a policy for couriers with a poor claims record. New drivers, or those with limited experience in courier work, might also encounter higher premiums as insurers may consider them to have a higher risk of accidents or claims.
Security measures
The location in which you park your van or car can significantly impact its security. Avoid parking in dark areas, as thieves are less likely to target a vehicle in a well-lit, visible location where they are more likely to be seen. Park your vehicle (especially if it is a van with rear access) so that the doors face against a wall or another vehicle. This will help prevent thieves accessing the cargo area.
Being mindful of how you park and stop can make the difference between an insurance claim being paid or denied. As a courier, never leave the vehicle unattended with the engine running as this can lead to vehicle theft. Lock the vehicle at every stop. Even if the stop is brief, the vehicle should be locked to prevent opportunistic theft.
Avoid driving the same routine route. Regularly changing delivery routes and schedules can prevent targeted attacks, as thieves may monitor and predict a courier’s routine.
Business type
The size and structure of your courier business can also impact insurance costs. Larger businesses with multiple vehicles and employees will typically face higher insurance costs due to the increased exposure to risk. However, you could benefit from economies of scale, with some insurers offering discounts for bulk coverage. Sole traders or small courier businesses might face lower overall costs, but they could miss out on the potential discounts available to larger operations.
The cost of courier insurance is influenced by a wide range of factors, including the type of insurance required, the value and type of goods transported, driver experience, location, vehicle characteristics, delivery frequency, coverage limits, claims history, business size, and regulatory compliance. By getting our expertise, you can make informed decisions that balance cost with the necessary protection for your courier business.
Get in touch
At BCD, we have long-standing, established relationships with a wide range of insurers. This means we can find the most effective and appropriate cover for your courier business. Our team of insurance advisers understand the factors that influence and affect courier insurance costs. When you get our advice and help, you can save on time, and potentially benefit from a competitively priced policy which covers your requirements.
Call: 0344 776 530