Self-employed couriers refused insurance by the UKs top insurance providers

Insurance research provider NimbleFins has shown that all of the UK’s top insurance providers are refusing to provide insurance for drivers who use their personal cars for courier work. The companies cite the additional risk of carrying out delivery work for their decision.

This means that thousands of self-employed drivers working for companies such as Deliveroo, Amazon, JustEat and Hermes could be left without adequate insurance cover, potentially leaving them liable for thousands of pounds in damages in the event of an accident.

Self-employed couriers must update their insurance

It is therefore important that all self-employed couriers that use their own vehicle for deliveries update their insurance policy to include hire & reward (H&R) protection. This includes couriers who are working on a part-time or casual basis.

The problem is that most major insurance companies including Churchill, Admiral, Privilege and DirectLine do not offer H&R protection. This means drivers will have to pay extra for PAYG cover from their courier firm, or cancel their insurance and choose another provider.

This last option presents a problem because many drivers will be forced to pay a cancellation fee. They will then be faced with a premium up to five times more expensive once H&R cover is included. For many self-employed couriers, this will result in significant financial loss.

Delivery firms step in with top-up insurance – But is it worth it?

As part of the solution, many of the larger delivery companies including Amazon and Hermes have started offering top-up insurance to their self-employed drivers. But this option is only available on a pay-as-you-go basis and only provides third-party cover.

Amazon insurance requirements

Amazon is one of the largest employers of self-employed delivery drivers in the UK. Couriers drive under Amazon Flex rules and can choose their own schedule and hours of work. Amazon states that drivers can earn around £13-15 per hour.

Amazon provides third-party top-up insurance to its Flex drivers but they must have business class 3 insurance on the vehicle itself. This allows the driver to use the vehicle for business use, but it is also essential that this policy also covers you for courier work.

Hermes insurance requirements

Much like Amazon, Hermes allows drivers to work on a casual or self-employed basis. They claim drivers can earn between £10-£15 per hour. One of the attractive things about Hermes is that they don’t require any previous experience as full training will be given.

Hermes states that it is the courier’s responsibility to provide their own insurance. However, like Amazon, they provide third-party top-up cover. This is charged on a PAYG basis with a daily charge taken directly from the couriers daily earnings. Like Amazon, the courier must also have business class 3 insurance on their vehicle.

Is it worth it?

Many couriers will be tempted to use the insurance offering from their partner companies, simply because it is more convenient. But is this the most cost-effective option and will it provide you with enough protection in the event of an accident?

Both Amazon and Hermes only offer third-party top-up protection. This means you will have to pay for your own vehicle insurance along with the top-up. Your own vehicle insurance will also need to meet business class 3 which most standard car policies do not.

Both the Amazon and Hermes offerings also only provide third-party protection for your vehicle. This is the bare minimum you need to remain compliant with the law, but it will not provide adequate protection should you have an accident.

For example, should you have an accident while delivering parcels, the cost of any damage to a third-party vehicle will be covered. But you will have to cover the cost of any repairs to your own vehicle yourself. You should also bear in mind that your vehicle will be out of action while repairs take place.

Also, neither company provides goods-in-transit insurance. This will give you additional protection for loss, theft and damage of any parcels should your vehicle be stolen or be involved in an accident. Not having goods-in-transit could leave you on the hook for thousands of pounds in damages.

Arranging your own courier insurance

While most mainstream insurance companies do not provide courier insurance, there are plenty of specialist providers that do. While this is not cheap, in most cases it will be more cost-effective than upgrading your own insurance to business class 3 and paying the top-up premium.

If you are working as a delivery driver or carrying food or parcels in exchange for money, you need to find a policy that provides hire & reward (H&R) cover along with social, domestic, pleasure and commuting (SDPC) cover. This will provide the cover you need for both professional and personal use.

Arranging your own self-employed courier insurance will also allow you to obtain comprehensive cover and goods-in-transit protection should you need it. In most cases, this is a prudent choice because it provides complete protection for both your vehicle and the goods within it.

Whichever option you choose, you mustn’t attempt to deliver parcels under a standard vehicle (SDPC) policy. In this scenario, your insurance will be void and you will not be covered in the event of an accident. In some instances, you may also be charged with driving without insurance.

Search for the best courier insurance deals

Total Insurance allows you to search specialist commercial insurance providers to find the best value policy. You can search and compare prices for courier, HGV, taxi, tradesman and fleet insurance. You just need to provide us with a few details about your vehicle and business and we’ll do the rest.

Complete the quote form here to obtain your own tailored courier quote.

Alternatively, our UK based customer service representatives are available 9 am to 5.30 pm each weekday. Give us a call on 0203 876 5045 for more information.