Delivery Service and Courier Insurance

Delivery drivers should be aware of the factors that can affect their business insurance needs in the states where they work. That includes:

• Most states require auto insurance. Every state except for New Hampshire requires auto liability insurance for your vehicle, including a commercial auto insurance policy for vehicles owned by a business. If you drive a personal vehicle for business use, you can get coverage for work-related driving with hired and non-owned auto insurance (HNOA).
• Almost every state requires workers' comp when you hire employees. The laws in most states require you to buy workers' compensation insurance as soon as you hire your first employee. Sole proprietors and contractors often buy this coverage for themselves to protect against costly medical expenses from work-related injuries.

Your state might also have its own regulations specific to delivery driving. For example, California and New York require commercial car insurance policies for all delivery drivers, whether they work full-time or part-time. New Jersey also mandates a specific amount of coverage for food delivery drivers.

Keep in mind that cities and other municipalities might have their own regulations for delivery drivers and couriers, as well.

Yes, almost every state requires auto insurance for delivery drivers. Self-employed business owners must also comply with these laws, whether you are a sole proprietor, independent contractor, or a freelancer, or working under a delivery contract.

• If the vehicle is titled to your business, then you should carry commercial auto insurance to comply with state laws.
• If you drive your own vehicle, then hired and non-owned auto insurance will provide the liability protection you need. It covers personal, leased, and rented vehicles used for business.

Another option that's sometimes available is a Transportation Network Company (TNC) endorsement for your personal auto insurance policy. This is often the cheapest insurance option for delivery drivers.

TNC riders are especially common for rideshare contractors, and fills gaps for drivers who receive limited auto insurance coverage from Lyft and similar companies. Other companies, like Grubhub or Instacart, won't provide any auto insurance and will require you to have your own coverage.

The difference between personal car insurance and commercial auto insurance can be complicated. For instance, your commercial auto policy might cover you while you have a customer's order in your vehicle, but not on your way to pick it up. But if you get into an accident while picking up an order, there's a chance your personal use provider could deny the claim.

Because of this, it's important to consult an insurance agent to make sure you have the right coverage.

Depending on the type of work you do, your delivery business may need additional coverage options. These insurance products cover other risks faced by businesses in your industry:

• Commercial umbrella insurance boosts the coverage on your general liability, commercial auto, and employer's liability insurance once the limit is reached on a claim. You might need it to meet a client's requirements for higher limits.
• Commercial property insurance helps your business recover financially after a fire, storm, or similar incident damages your office or its contents. Small business owners can often bundle it with general liability insurance in a business owner's policy at a discount.
• Business interruption insurance is also called business income insurance. This coverage pays for financial losses when your business halts operations due to a fire, storm, or other covered property loss. It's often included with commercial property insurance or a business owner's policy.
• Inland marine insurance: Commercial property insurance only covers property at your main location, so you may need inland marine insurance for items in transit or stored off-site.