What is the cost for courier insurance?

What is the cost for courier insurance?

I am looking into the idea of starting a local courier business, just me with no employees (at least to start with). I'-m just trying to get an idea of what some of the start up costs would be, one of which is courier insurance, without having to talk to an insurance agent. I would only be delivering small packages and letters/paperwork in Green Bay WI and the surrounding areas.


I used to work in the Minneapolis office for a national courier company, and our insurance had a large ($250,000) self-retention. That means for every accident we had, we had to pay the first $250,000 on each claim. And since most claims do not cost that much, we were essentially “self insured.”One of the things that made life difficult was the competition that came from the “ma and pa” operations. They could always beat our price because their costs were lower.You did not specify if you are talking about “routed” delivery, or “on-call” delivery. The “on-call” side would require either a large client base or constant advertising. And you would need someone to man the call-center. If you had a “routed” delivery business, then all you need are a few clients to establish your daily route.If you are offering “routed” delivery that means you are driving the route everyday, meaning Monday through Friday. And your clients are depending on you. So you would also need to have a backup vehicle available. So if your car ends up in the shop, you have another vehicle to drive. You would also need a backup driver. So if you end up with the flu, and you are really, really sick, then you have someone who can drive the route for you that day.Some “ma & pa” courier companies operate under the radar. That means they only have personal insurance on their car. And if they have an accident, they never mention that they were delivering packages for clients. This is risky. If the insurance company finds out, they may claim misrepresentation.You would need a Business Auto policy. And they would want to know how many miles you are driving per day, and who your drivers are. Not sure of the cost, but probably more than double the cost of your personal insurance.The other hidden cost is the wear and tear on your vehicle. I know someone who did this with his brand new pickup truck, and after only one year of making deliveries he had about 150,000 miles on his truck. The truck was essentially worn out. (It was one of those tiny pickup trucks- I don’t remember the name.) But he had a five year loan on the truck. Now he had a problem. He could not afford to replace his truck, and did not want another car loan. (He quit the business, and came to work for me as a Safety Supervisor.)Fuel would be a significant expense these days. (We used to buy gas in bulk, since we had our own gas pumps.) And when the price went up, we would charge our customers a “fuel surcharge.”Much of the courier business has dried up. We used to do a lot of bank work, since each check written had to physically travel back to the bank of origin. But then they changed the law, and now they allow banks to transmit scanned images of the checks. We also delivered photo processing between the lab and the drug store. And now most everything is digital.And we have not talked about cargo insurance. What happens if you lose a load? We had one of our dock trucks rollover in a rainstorm, and many crates of expensive pharmaceuticals were destroyed. The truck rolled over in a wet ditch, which was a muddy mess.



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