What Insurance Do Delivery Drivers Need?
There are many conflicting reports online about what insurance delivery drivers in the UK need to work as a courier. Amazon, for example, states that Business Class 3 coverage will be sufficient. In contrast, Deliveroo state you need a policy that specifically includes “Hire and Reward” cover – something Business Use Class 3 does not include.
This article will clarify exactly what is and isn’t required to work as a delivery driver/courier in the UK. If you’d like to know more, check out the in-depth guide to delivery driver insurance at NimbleFins.
What is Food Delivery insurance?
Food Delivery insurance is designed to cover your vehicle while you’re using it to deliver food from a restaurant to a customer. It protects you from the additional risks delivery driving can expose you to, such as long hours on the road, unfamiliar routes and delivering to tight deadlines.
You may also see it referred to as Courier insurance or Hire and Reward. While definitions vary from insurer to insurer, Courier/Food Delivery insurance typically refers to “full-time” policies (monthly/annual) that include Hire and Reward coverage within them. In contrast, bespoke Hire and Reward policies are typically “top-up/pay-as-you-go”, meaning you only pay for coverage while you’re working.
Both have their benefits and drawbacks – Courier/Food Delivery policies can be expensive, typically starting around £2,000 per year, but also usually include Social, Domestic & Pleasure cover, so you know for sure you’re covered whether you’re working or not. Top-up Hire and Reward policies can be considerably cheaper, starting from just £1 per hour, but many of the UK’s leading SD&P providers don’t accept drivers using the top-up cover, so you risk voiding your coverage altogether.
Irrespective of which you choose, one thing is clear – Business Use Class 3 will not cover delivery drivers, so if you are considering taking up any form of courier or delivery work (or anything that involves using your vehicle in return for payment, such as furniture removal or taxi driving) make sure you’re appropriately covered.
Does car insurance cover delivery driving?
No, your Social, Domestic & Pleasure Car insurance will not cover delivery driving. This means that if you are using your vehicle for courier or delivery work without the correct insurance, you are not covered by your insurer – driving without the correct insurance is illegal in the UK, so you face the risk of fines and penalty points if you do so.
When you begin working as a courier or delivery driver, the risk profile insurers use to estimate your insurance costs changes. You’ll be racking up more miles, regularly parking roadside or outside busy restaurants and may even have to rush to meet delivery deadlines if a restaurant lets you down. This ultimately means that if you’re involved in an accident, and your insurer discovers you’ve been carrying out delivery work, they’re unlikely to protect you.
The way to avoid this is fairly simple – you must contact your insurance provider before accepting any delivery work in order to ensure that your coverage is valid and you’re protected at all times. This will, yes, likely increase the cost of your insurance (assuming your provider is happy for you to take on courier work), but this is a considerably better option than driving uncovered, which could lead to fines, penalty points and expensive legal fees/compensation if you are involved in an accident.
How much does delivery insurance cost?
An average monthly Delivery/Courier, Car insurance policy, starts from around £220 per month for Third Party Only (TPO) coverage for a typical driver. A Comprehensive policy is likely to set you back a little more, coming in around £260 per month. But prices can be very different from one driver to the next.
If you’re delivering on a bike, a TPO Bike Delivery insurance policy is likely to start around the £150 per month mark, with Comprehensive Bike Delivery insurance policies usually costing around £195 per month.
You may find your costs vary on a number of the same factors that your traditional Social, Domestic & Pleasure policy does, so you’ll be able to save money on your Delivery insurance by owning a less powerful vehicle, having more experience on the road and driving fewer miles (although long mileage can be difficult to avoid, and many full-time couriers easily clock up over 80,000 miles per year).
While delivering with your car/bike is a fairly new concept in the UK (with apps like Deliveroo and UberEats only really taking off in the 2010s), van deliveries have been a core part of UK logistics and transportation for a much longer time. As such, there are far more Van Delivery insurance companies, giving drivers more options (and making costs comparatively cheaper due to increased competition).
As such, a Comprehensive Van Delivery insurance policy can start from as little as £142 per month. TPO and Third Party, Fire and Theft (TPFT) coverages are usually more expensive, as insurers prefer more risk-averse van drivers, so keep that in mind while you’re hunting for quotes.
While strong competition in the market does play a part, Van Delivery insurance costs are also lower due to several other factors, such as regular routes, rarely making drops roadside and the vehicles’ lower speed.