Courier Insurance: What Delivery Drivers Need to Know

What Is Courier Insurance?

Courier insurance is a specialist type of motor insurance designed for individuals and businesses that use vehicles to deliver goods for payment. Standard motor insurance policies — whether social, domestic, or even business use — do not cover the carriage of goods for hire or reward. If you are paid to deliver parcels, documents, or other items, you need a policy that specifically includes hire and reward cover.

The courier and delivery sector has grown significantly in recent years, driven by the expansion of e-commerce and the rise of platform-based delivery services. Whether you are a self-employed courier working with Amazon, DPD, or Hermes, or you run your own multi-vehicle delivery operation, the insurance requirements are specific and must be met to operate legally.

Hire and Reward: The Key Requirement

"Hire and reward" is the legal term for using a vehicle to carry goods or passengers in exchange for payment. Under the Road Traffic Act 1988, any vehicle used for hire and reward must be insured for that purpose. Using a vehicle for courier work without hire and reward cover is a criminal offence and can result in:

• A fine of up to £5,000 and six penalty points
• Seizure and potential destruction of the vehicle
• A criminal record for driving without insurance
• Personal liability for any damage or injury caused in an accident
• Invalidation of any claim, leaving you to pay repair and injury costs personally

Types of Cover You May Need

A comprehensive courier insurance arrangement typically includes several elements:

Motor insurance with hire and reward. This is the mandatory element — your vehicle must be insured for courier use. Cover is available at three levels: third party only, third party fire and theft, and comprehensive. For most couriers, comprehensive cover is advisable given the high mileage and the risk of vehicle damage.

Goods in transit (GIT) insurance. This covers the goods you are carrying against loss or damage during transit. Many courier contracts require you to have GIT cover, and some specify a minimum level of cover (often £10,000 to £50,000).

Public liability insurance. This covers your legal liability if you cause injury to a third party or damage to their property while carrying out your work — for example, if you damage a customer's property while making a delivery. Cover of £1 million to £5 million is typical.

Employers' liability insurance. If you employ anyone — including casual or temporary workers — you are legally required to have employers' liability insurance with a minimum cover of £5 million. This is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969.

Goods in Transit Insurance

Goods in transit (GIT) insurance protects against the loss of or damage to goods while they are being transported. For couriers, this is particularly important because you are often carrying goods that belong to someone else, and you may be held liable if they are lost, stolen, or damaged.

GIT policies typically cover goods against:

• Accidental damage during loading, transit, and unloading
• Theft from the vehicle (subject to security conditions)
• Fire and explosion
• Road traffic accidents
• Water damage

Most policies will have conditions regarding vehicle security — for example, the vehicle must be locked when unattended, and high-value goods may need to be stored in a locked compartment. Overnight storage conditions are also common: the vehicle may need to be kept in a locked garage or secure compound.

Public Liability Insurance

Public liability insurance is not a legal requirement for couriers, but it is strongly advisable and often required by the companies you work with. Many courier platforms and logistics companies require their drivers to hold a minimum level of public liability cover as a condition of their contract.

Public liability covers scenarios such as:

• Accidentally damaging a customer's property during delivery
• A member of the public tripping over your delivery equipment
• Damage to a business premises while making a collection or delivery
• Injury caused by goods falling from your vehicle during loading or unloading

Fleet Insurance for Courier Businesses

If you operate a courier business with three or more vehicles, fleet insurance may be more cost-effective and easier to manage than individual policies. A fleet policy covers all vehicles under a single arrangement, with one renewal date, one set of terms, and one point of contact.

Fleet policies for courier businesses can include hire and reward cover for all vehicles, and can accommodate a mix of vehicle types — vans, cars, and larger commercial vehicles. The fleet can usually be adjusted during the policy period as vehicles are added or removed.

Common Mistakes to Avoid

• Using standard business motor insurance for courier work — this is not the same as hire and reward
• Not declaring the correct use of the vehicle to the insurer
• Failing to have goods in transit cover when your contract requires it
• Not meeting the vehicle security conditions in your GIT policy
• Assuming the platform you work for provides insurance — check the terms carefully
• Not having public liability cover when your contract requires it
• Underinsuring goods in transit — check the maximum value of goods you carry

Next Steps

If you are a self-employed courier or run a delivery business, ensuring you have the right insurance is essential — both to operate legally and to protect your livelihood. The consequences of being uninsured or underinsured can be severe, both financially and legally.

Focus Insurance Services can help courier operators and delivery businesses find appropriate cover, whether you need a single-vehicle hire and reward policy or a multi-vehicle fleet arrangement. Contact our team for a no-obligation discussion about your courier insurance needs.