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Courier insurance is crucial for the successful ruining of any type of carrier business.The goods that you are in charge of may be valuable or if not valuable can be sold quickly for a decent margin on the Black or Gray markets, making your cargo attractive to thieves that specialise in the theft of goods. Put bluntly being in the delivery business puts you at an extra risk of being the victim of a crime that involves the disappearance of your goods thanks to the cunning of a thief.
All businesses carry some risks that are inherent to them, and this industry is no exception. If you are planning to set up a express business, then you must be prepared to take on those risks and how you can deal with them such that your interests are not compromised.
Insurance Types
Normally cover needed is of two types the first to cover the vehicle and the second the goods. The first one which is mandatory allows you to use your vehicles on the UK roads for daily business and is basic vehicle insurance. This policy provides protection to your vehicle which maybe a bike, a car, a small van or large van should it be involved in an accident. Transport vehicles are crucial to the successful running of any carrier business and as such you should also consider adding breakdown cover to reduce any time off the road as a result mechanical failure.
Levels of Courier Cover
With insurance it is important to have the right level of cover without over insuring or indeed being under insured. The former means that you have included elements of a policy that you do not need or are unnecessary. Being under covered clearly means you do not have sufficient cover so should a time time arrive to make a claim you will be disappointed to realize that you have been under insured and maybe to an extent that you have to shoulder most of the costs. Putting your business in such a situation could easily result in bankruptcy especially if third party claims are extensive and include medical bills. If you employee staff then with only a few exceptions you will legally need to take out employee liability protection.
Express Vehicle Cover Available in 3 levels
- Third party only. Covers you for any damage made to the property of a third party including or any injuries that may result.
- Third party plus Fire & Theft
- Comprehensive
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Goods in Transit knows as GIT Insurance
Put simply GIT covers the goods that you are in temporary charge of on behalf of a third party (the owner of the goods). So whilst your standard courier insurance covers your vehicle, goods in transit cover abbreviated to GIT covers your for damage to the goods that you or your company are hauling or transporting.
It is important to be aware that this type of cover can be very particular and does come with common exclusions for example dangerous chemicals would not normally be included. some insurers may only provide partial cover for items deemed an easy target for theft electronic items would normally fall into this category.
Undoubtedly you will come across some courier requests that have you questioning if you would be covered as fall outside the boundaries of the normal cargo range that your business has been responsible for in the past. On these occasions one way to proceed would be as follows. First check with your broker if you will be covered if not you could then suggest to the potential customer to provide their own GIT cover.
Public Liability
Any business that has contact with the public leave themselves open to public liability claims, for example if the goods that you are couriering were to fall out the rear and cause injury to passing pedestrians or fellow motorists. In brief public liability insurance helps protect your business against claims lodged by the public for damages caused by your courier business operations. Not having this protection is not an advisable option as during your business, there are many things that can and will go wrong. These have the potential to hamper your business operations and cause losses to your customers which they would want to recover from you. If you have to settle these claims out of your pocket the impact on your business would be severe and consider the time, effort and focus that are necessary should it go legal, you will also soon lose business credibility. A carefully built up business can thus come crumbling down pretty quickly should you fail to buy the necessary cover.
What is the Cost of Courier Insurance?
The cost of courier cover depends on a multitude of factors some of which you do have control over. Like all vehicles, vans, bikes and cars are broken down into risk categories or groups. The normal range is 1 to 20 , category 1 contains vehicles that are in general the cheapest to insure. The main factors that are used to determine which group are the price and size of the transport or messenger vehicle. This is followed by the average costs to repaid said vehicle when damaged and the price of spare parts.
What is the difference if any between haulage and courier cover
Both have similarities, but they are also different. Both have one common feature they both include cover for ‘ carriage of goods for hire and reward'. A premium is derived based on risk to the broker of having to pay out and average pay out amount. As risk can be greater for haulage the underwriters differentiate these 2 modes of carriage as different and policies are constructed to reflect the difference.
The key difference is that haulage is associated with the movement of a consignment from A to B , the consignment most often is white goods or dry goods but can also be livestock. Couriers tend to provide a delivery service of various items and one journey typically will involve many drop offs or deliveries at different locations.
As haulier usually equates to the bulk movement of good , hauliers will be using a heavy goods vehicle to provide the said service. Couriers tend towards faster and cheaper delivery mode that include car, small van , motorcycle or push bike.
In summary if you are being paid for the delivery of other peoples good on a multi drop basis then you should purchase insurance for couriers. The converse is true of haulage cover which will involve moving bulk goods from origin to destination. Multi drop is normally accepted to be 3 or more different drop locations per day.
In addition to courier insurance for your commercial vehicle you will also require cover for GIT and public liability, the later will protect your merchandise whilst in transit. Make it clear to the broker the types of haulage or courier service that you intend to provide. It is a fact that some brokerages will not cover some materials except if specifically included. For example dangerous chemicals or expensive item such as gold or diamonds are normally exclude if you read the policy details. If at any time you change the types of good that you work with double check with your broker to verify that your existing policy covers the new haulage category.