Package Delivery insurance – cost and types of policies

Whenever you budget the expenses of your business, Package Delivery insurance must be included in the list because you can’t always know exactly what is going to happen in the future.

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With the protection provided by insurance against accidents and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your Package Delivery enterprise, you must consider how much financial risk you are taking on.

If your Package Delivery business runs without proper insurance, you are taking a giant chance not just of losing some money but of a complete wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the consequences of their actions. 

Package Delivery Insurance

In this article, we are giving very general guidelines for small businesses to outline what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Package Delivery business?

What this means, for any Package Delivery business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Package Delivery business is not protected by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have claimed.

When you are running your Package Delivery operations, you can’t deny responsibility for the outcomes of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as a corporation, all of that liability belongs to you as a person.

What does Package Delivery insurance protect you from?

For your Package Delivery business, the most important sorts of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will describe the most important points any Package Delivery business owner should consider when negotiating the insurance needed.

The main categories of insurance for your Package Delivery businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Package Delivery business is dealing directly with other people, and that means you usually have the danger that some accident can happen to them themselves or else something of theirs can be ruined.

In such a case, they can sue you for compensation.

General liability insurance policy for your Package Delivery business covers you against claims coming from injury to clients or damage to their property.

It protects your Package Delivery business from the claims themselves and as well to any follow-on court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts demand proper liability insurance.

The usual level of general liability insurance for your Package Delivery business would be with a upper limit of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Package Delivery insurance operations.

Professional liability insurance for your Package Delivery business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Package Delivery business for them, you can quickly have to fight a law suit.

Even if the lawsuit against you is judged in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Every small Package Delivery business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of Package Delivery insurance section below for average prices of professional liability insurance for your Package Delivery operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that what they received didn’t meet your description of function, or that your guidance was basically incorrect.

You need to understand the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for injuries caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Package Delivery

Only you can estimate exactly how much insurance you need.

Best advice is to consult with experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your Package Delivery business

Be careful! – practically all policies for private vehicle insurance do not cover any happening like theft or accidental damage when the vehicle is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a proper commercial vehicle insurance package.

Commercial van policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is covered if your car is involved in an accident.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The required value of the insurance is worked-out for the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your Package Delivery business needs unique and expensive equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy any equipment needed to keep your Package Delivery business running.

It is difficult to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Package Delivery business’ equipment.

Commercial Property insurance

Any Package Delivery business that owns or rents space in a building needs a commercial property insurance policy.

If you own the property, you probably have a substantial capital investment, as well as a big liability if there’s a mortgage.

Every physical building location must carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your Package Delivery business operates in areas of high risk, like California or South Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where unlimited cold snaps can cause damage to outer coverings of Package Delivery business premises, there is a need for more supplementary cover than in warmer climes.

Whereas the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Package Delivery insurance section below to give some estimate of the average prices per million dollars of property insurance for your Package Delivery business.

Temporary insurance by month, week or day for your Package Delivery business

Is your Package Delivery business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Package Delivery – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having adequate risk cover.

The important feature of short-term insurance is that you pay for the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of better business activity, get the existing cover improved.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Package Delivery business

You have the choice to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP merges commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized Package Delivery businesses, such as yours.

There are some limits that will determine whether BOP is suitable for your own business.

BOPs do not cover your professional liability or commercial vehicle cover.

Also, the size of your business will dictate whether you are eligible to take out BOP cover.

The typical business that is eligible for a BOP policy must have no more than one hundred employees, and maximum five million dollars in annual revenue.

In addition, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Package Delivery business employees

In almost all states, it is mandatory to have workers compensation insurance when your Package Delivery business has one or more employees.

Workers compensation insurance covers the enterprise against any costs that arise if an employee experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer having to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you can’t obtain your workers compensation obligations from private insurance companies.

Workers compensation premiums are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every Package Delivery insurance level is unique, there are enough examples of standard quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your Package Delivery businesses needs.

Types of insurance Price range
Product liability insurance $324 – $869
General liability insurance $761 – $900
Commercial vehicle insurance $1952 – $3278
Public liability insurance $310 – $755
Equipment insurance $452 – $1484
Commercial insurance $879 – $2627

Cost of insurance for your Package Delivery operations depends on many different factors.

We have reckoned these figures for small freelance Package Delivery businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they will be about 20%-30% cheaper.

The location and size and type of your Package Delivery business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

Also you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another reliable source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Package Delivery operations?

This is an umbrella term used to describe basic insurance policies designed to protect Package Delivery business owners from risks like bodily injury, property damage, claims of negligence.

Does my Package Delivery business have to have insurance?

Some of the types of insurance are not mandatory for you to run your business, but they can protect you from risks in your business operations.

Some other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Package Delivery business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for Package Delivery insurance.

How much will Package Delivery business insurance cost?

In addition to the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

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