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What Types of Insurance Does a Courier Business Need?

What Types of Insurance Does a Courier Business Need?

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What Types of Insurance Does a Courier Business Need?

Courier Insurance Quotes

Costs for business insurance can vary greatly, and getting insurance quotes from multiple companies is recommended in order to get the best pricing.

Coverwallet and Hiscox offer easy business insurance quotes at affordable prices.

What Types of Insurance Does a Courier Business Need?

Urgent or on-demand package deliveries cannot always be met with standard shipping services. But, courier businesses can meet this need and provide quick pick-ups and drop-offs on a scheduled or on-demand basis. However, since courier services need to be timely and the customer’s items may be fragile, couriers will face several risks that could lead to injuries or liabilities. As a result, insurance is vital to protect against risks.

Related: Guide to starting a courier business

What Are Some Risks for a Courier Business?

Some of the risks that a courier business will encounter include the following:

  • Employee injuries
  • Car accidents
  • Loss of packages
  • On-site customer injuries

Employee Injuries

The employees making the deliveries face the greatest risk of injury on the job. Some common sources of injury for delivery personnel include 

  • car accidents
  • muscle strains from carrying heavy items
  • slips and falls (especially on stairs and slick or icy walkways)
  • bicycle or pedestrian injuries
  • exposure to extreme weather
  • exposure to harmful substances
  • contact with biomedical materials

Delivery personnel who walk or use mopeds or bikes have an increased risk of injury, especially in high-traffic areas. During deliveries, the injury risk may also increase if the employee is pressed to meet timelines. This urgency may pressure the employee to travel quickly and potentially unsafely.

In-office employees face usual office hazards. For example, employees may suffer injuries from slips and falls on slick or cluttered walkways. Additionally, muscle or joint strains occur from completing repetitive motions, such as lifting boxes and typing.

Car Accidents

Car accidents pose several risks for courier businesses. First, car accidents are a safety risk for employees, and at-fault car accidents expose the business to bodily injury and property damage liabilities. Car accidents can occur due to

  • traffic
  • driver fatigue
  • distracted driving
  • driving in unfamiliar locations
  • inclement weather
  • operating large vehicles

In addition, car accidents put business vehicles at risk of damage or a total loss. Vehicles can easily make up a large portion of the business’s assets and need to be operational to maintain business flow. So, damage to business vehicles is not only costly but also threatens the business’s availability to provide services.

Loss of Packages

While the courier business delivers a package, there is a risk that the items in its care may become damaged or lost. Damage can occur due to events such as car accidents, poor weather, or employee negligence. In addition, package loss happens from thefts and misplacements. Although every package loss or damage is harmful, some more financially harmful losses include the loss or damage of 

  • high-value items
  • time-sensitive items
  • temperature-sensitive materials
  • documents with private or personal information

On-Site Customer Injuries

Courier businesses may occasionally have customers come on-site, exposing the business to liabilities resulting from customer injuries. Commonly, the injury claims on business premises resulting from slips, trips, and falls. For example, uneven, slippery, or cluttered walkways are common trip and fall hazards.

Customers may face other bodily harm hazards. For example, a customer may suffer back or muscle strains from lifting heavy packages and injuries from falling boxes or shelving units.


What Types of Insurance Should a Courier Business Consider?

Indeed, no business is without risk, and courier businesses have several. For this reason, insurance is an essential tool to protect business assets from financial losses caused by hazards. Some of the key types of business insurance policies that a courier business should consider include the following:

  • Workers’ compensation insurance
  • Commercial automobile insurance
  • Inland marine insurance
  • General liability insurance

Workers’ Compensation Insurance

A workers’ compensation policy offers coverage for employee injury or illnesses while working. Fortunately, a workers’ compensation policy provides many benefits to help offset the loss of income and medical costs. For example, this line of insurance includes the following coverages:

  • Payments on medical bills
  • Reimbursement for lost income
  • Coverage for rehabilitation care
  • Disability income
  • Funeral expenses
  • Legal costs

Many states require businesses with employees to carry a workers’ compensation policy because it provides valuable benefits to employees. However, workers’ compensation also benefits businesses because the policy protects the business from potential lawsuits.

Commercial Auto Insurance

Commercial automobile insurance provides two necessary categories of coverage for businesses: 1) liability insurance and 2) physical damage insurance. Both coverages are important and cover at-fault accidents and repairs or replacements for damage to business-owned vehicles.

1. Liability Insurance. Liability insurance covers claims of bodily injury or property damage resulting from at-fault accidents. It protects the business from many claim costs, including third-party medical bills, vehicle repairs, legal defense costs, and settlements.

2. Physical Damage Insurance. Physical damage insurance covers business-owned vehicles for repairs and replacements against covered perils. Typical policies cover perils such as collisions and comprehensive damages (i.e., falling objects, theft, and vandalism).

If the business owner or employee uses a personal vehicle for deliveries and a commercial auto policy isn’t in place, their personal auto insurance will not likely cover any damages. 

Inland Marine Insurance

An inland marine insurance policy insures items wherever they go and is commonly used to insure cargo. Since the items belong to the customer, the courier business needs a specific inland marine insurance called Bailee’s insurance coverage. This line of coverage is designed to protect non-owned items against hazards such as loss, theft, or damage.

General Liability ­Insurance

A general liability policy for premises and operations covers bodily injury and property damage claims occurring on-site or due to the courier business’s actions. For example, a customer who slips on a wet floor or who collides with a courier bike may sue the business for their expenses. Fortunately, a general liability policy protects the business from these sorts of claims.

A general liability policy covers various claim-related expenses. For instance, the policy will cover payments for

  • Medical bills
  • Property damage repairs
  • Legal fees
  • Settlements

Although courier businesses may not have frequent on-site customers, this coverage is still useful to protect the occasional on-site customer. And even more so, it covers vendors and visitors who may be on-site more regularly than customers.

How Much Does Insurance Cost for a Courier Business?

Insurance costs vary depending on the insurance needs of each courier business. For instance, a courier business that operates solely by using bicycles or on-foot delivery methods may not need commercial automobile insurance. This type of courier business may instead choose to boost its workers’ compensation policy. Likewise, a courier business with frequent on-site visitors may need higher general liability coverage limits than a courier business with few on-site visitors.

The greatest factors influencing insurance costs will be coverage amounts and risk exposures. For example, some of the elements that affect coverage amounts and risk exposures include the following:
– The number of employees on the payroll
– The number and value of business-owned vehicles
– Delivery routes and expected number of customers
– The type of items being delivered (i.e., paper documents vs. biological materials)
– The value of customer items in the business’s care
– Employee training and certification
– Any past or current lawsuits or insurance claims

Generally, the best way for business owners to determine courier insurance costs is by contacting an insurance company for an estimate. Plus, contacting more than one company allows you to compare quotes and pick a policy package that offers not only the most competitive price but also the greatest coverage amounts and benefits.

What Types of Insurance Does a Courier Business Need?

What Types of Insurance Does a Courier Business Need?

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