E-commerce is booming worldwide. The rise in e-commerce has resulted in a significant increase in the demand for delivery services.
As of 2023, 1,148,585 people are employed in the couriers & local delivery services industry. Zippia’s latest findings reveal that 5,122 couriers or independent contractors are there in the United States.
The opportunity to earn more than a traditional employee is the number one reason people work as independent courier contractors. Independent courier earns between $31,032 to $39,640/year, whereas the average base salary of a full-time courier is $27,358/year. The ability to decide your own working hours is another reason people in the couriers & local delivery services prefer working independently.
Working as an independent courier is lucrative. However, the role is accompanied by risks. Thus, insurance is a must-have for independent courier contractors. In this article, we’ll discuss the different types of insurance independent courier contractors benefit from.
Independent Contractor Courier Insurance: An Overview
A specialized form of coverage customized to the unique risks faced by individuals involved in picking up goods and delivering them for hire and reward is independent contractor courier insurance.
The term “courier insurance” refers to the cover for your car while transporting goods. But it isn’t just your car that needs to be protected when you’re making deliveries. You also require insurance for the goods you transport.
Types of Insurance Independent Courier Contractor Require
Independent courier contractors need several types of insurance to protect themselves and their businesses from liabilities. Some of these include:
1. General Liability Insurance
A 1099 worker or a freelance, independent contractor can be held liable for injuring people or their properties. Independent courier contractors aren’t exempt from this liability. That is why general liability insurance is a must-have for every independent courier contractor.
This type of insurance will protect you from general claims involving property damage or bodily injuries that result from your services. General liability insurance will also protect you against personal and advertising injury, such as claims of slander, libel, or reputational damage. That is to say, if someone accuses you of damaging their goods, this insurance will help you cover legal costs.
Besides, general liability insurance provides coverage against medical expenses and contractual liability.
Infinite Risk Management & Insurance Solutions explains that a properly procured general liability policy will allow you to respond quickly in the case of loss for which you are responsible. With this policy in place, you can focus on your core operations and keep your clients happy.
Click here to learn more about general liability insurance coverage customized to your individual risk profile.
2. Motor Insurance
Couriers require motor vehicles to deliver goods, so it’s no surprise that motor insurance is a must-have for them. In fact, you’re legally required to have motor insurance if you use your motorcycle, van, or car for delivery purposes.
Motor insurance will cover you in the event of an accident in which your vehicle causes bodily injuries or damages to others. Opt for comprehensive motor insurance. It will cover your car, too, in case it gets damaged in an auto accident.
Inform your insurer if you intend to make deliveries in your personal vehicle. That is because personal auto insurance policies don’t offer coverage for incidents and accidents related to business use. You will have to pay an extra premium to eliminate business use exclusion from your motor insurance policy.
3. Goods in Transit Insurance
As an independent courier contractor, you deliver documents, packages, and other items on behalf of individuals and businesses. This makes you responsible for the loss, theft, or damage of goods in your possession.
Goods in transit insurance covers goods against all kinds of damages from the point of origin to the final destination when they are in the possession of couriers. This is what makes this insurance policy absolutely necessary for independent courier contractors.
Goods in transit insurance will protect you in case any goods in your possession get damaged or are lost. However, these insurance policies typically contain limits on per item’s maximum value as well as the consignment’s maximum total value.
Be sure to understand the limits to ensure they align with the value of goods transported when choosing goods in transit insurance. This will help you avoid the risk of underinsurance.
To wrap things up, insurance is vital for independent courier contractors to run a successful delivery business. Some insurance policies, such as auto insurance, are legally required for couriers, whereas other policies, such as goods in transit, are optional. Opting for the latter offers peace of mind.
Be sure to find out which insurance policies are mandated by law for independent courier contractors in your state. Purchase them first. You can purchase optional policies later. However, your peace of mind and financial security lies in buying the right cover. Take time out to understand what you are covered for and what not. This will help you protect your business from unexpected losses.