Hire and reward insurance
If you use your van to deliver goods or parcels in exchange for payment, standard van insurance won't cover you. You'll need hire and reward insurance. It's a type of policy designed specifically for couriers and drivers who earn money on the road. Here we look at how it works, what it covers and how to find the right policy.
TrustScore 4.7 | 38,805 reviewsWhat is hire and reward insurance?
Hire and reward insurance, also known as courier insurance, covers you when you're transporting goods in exchange for payment.
For courier and delivery drivers, that means any time you're carrying parcels, packages or goods as part of your work.
A standard private van insurance policy only covers trips for social, domestic and pleasure (SDP) purposes. If you use your van for commuting, travelling to and from work sites and carrying your own tools and equipment, then you’re getting into business van insurance territory.
Getting paid to move someone else's goods takes you into another area again: hire and reward. Driving without the right cover while making deliveries could invalidate any claim and leave you personally liable for damage or injury you cause.
Hire and reward insurance is a legal requirement if you're working as a courier or delivery driver.
In other words, it's not optional.
Who needs hire and reward insurance?
If you're paid to transport goods in your van, you need it. That includes:
- Couriers
Self-employed couriers working for delivery networks like Amazon Flex, DPD or Evri
- Food delivery drivers
Delivery drivers working for restaurants or platforms like Deliveroo or Just Eat
- Multi-drop delivery drivers
Multi-drop delivery drivers doing local rounds that include several addresses
- Goods transporters
Drivers transporting goods for a single business on a regular basis
“If you’re making deliveries as part of your job, you need hire and reward insurance.
Without it, not only will you be breaking the law, but you won’t be able to make a claim if your van is involved in an accident while you’re working.
This could see you footing the bill for everything from repairs to a full replacement of your vehicle. Plus, you could be held liable for any damages you do to a third party too. Ouch.”
What does courier van insurance cover?
This depends on your policy, but here's a breakdown of what's typically covered and not covered.
Typically included:
- Vehicle damage
Covers repair or replacement costs if your van is damaged in an accident while you're working, provided you have comprehensive cover.
- Third-party liability
Pays for damage or injury caused to other people or their property during your deliveries.
- Carriage of goods for hire and reward
You can legally deliver goods in return for payment. Without this type of cover, you cannot work as a delivery driver, and any incidents your van is involved in while at work won't be covered.
- Fire and theft
Covers your van if it's stolen or damaged by fire, whether you're working or parked up.
Not typically included:
- Unapproved drivers
Only drivers named on the policy will be covered. If, say, a colleague or family member drives your van without being added to the policy, any claim could be refused.
- Undeclared business activities
If you start doing a different type of delivery work without telling your insurer – switching from parcel delivery to food delivery, for example – you risk not being covered.
- Goods not declared
Transportation of certain high-value or hazardous items might need to be specifically declared or covered by a separate policy.
- Wear and tear
Mechanical failures, routine maintenance and gradual deterioration aren't covered by any van insurance policy
What optional extras can I add onto a hire and reward policy?
Add-ons allow you to tailor your policy to your exact needs for an additional fee. Popular add-ons include:
Goods in transit cover
Goods in transit add-ons covers loss, damage or theft of goods in the van. Please note that hire and reward insurance does not cover the goods you’re carrying – it’s just vehicle cover
Public liability insurance
Public liability insurance provides you with legal protection if a member of the public is injured or their property is damaged as a result of your work. For example, if you drop a parcel and someone trips over it.
Legal expenses cover
Provides you with cover for legal expenses if you’re involved in a dispute or if someone makes a claim against you in the course of your courier work.
Breakdown cover
Breakdown cover provides you with roadside assistance if your van breaks down while you're on a job. Worth considering if your income depends on keeping to a delivery schedule.
Replacement vehicle
Some policies offer a temporary vehicle if your van is off the road following an accident or theft.
How can I get cheaper hire and reward inurance?
Here's some tips that can help secure you a great deal.
- Compare quotes
Compare quotes lets you see exactly what's out there, and makes it easier to find the right policy at the right price.
- Keep your vehicle secure
Park your van safely overnight, ideally on a driver or in a garage, and consider adding an alarm or tracker. The safer your vehicle, the lower your premiums could be.
- Correctly estimate your mileage
Choose mileage that matches your actual usage so you’re not overpaying. Just make sure not to underestimate either.
- Increase your voluntary excess
This could reduce premiums, although make sure your voluntary excess is still affordable if you need to claim.
- Build up your no claims bonus
Maintain a clean driving record to build up your no claims bonus. Each year you go without claiming qualifies you for lower rates on your insurance, up to a set limit.
- Consider black box insurance
Black box insurance policies record your trips and reward safer driving with potentially lower premiums.
Need more help?
Try our hire and reward insurance FAQs.
What type of van do I need for courier work?
There's no legal requirement to use a specific type of van for courier work, although in practice most couriers use a medium to large panel van. This could be something like a Ford Transit, Vauxhall Vivaro or Mercedes Sprinter. These offer the load capacity needed for multi-drop delivery rounds.
That said, some food delivery drivers work with smaller vans or even cars. Obviously, the vehicle you use will affect your insurance premium. As such, it's worth getting quotes for your specific make and model before you commit to buy.
Does hire and reward insurance cover food delivery?
Yes, as long as your policy includes food delivery as a declared use. Some policies cover it as standard, while others treat it as a separate category.
If you're delivering for a platform like Deliveroo, Just Eat or Uber Eats, check the policy wording carefully. And it’s worth looking at goods in transit (GIT) cover if you want the food itself to be protected while in your van.
Do couriers have to pay VAT on their hire and reward van insurance?
Yes, as long as your policy includes food delivery as a declared use. Some policies cover it as standard, while others treat it as a separate category.
If you're delivering for a platform like Deliveroo, Just Eat or Uber Eats, check the policy wording carefully. And it’s worth looking at goods in transit (GIT) cover if you want the food itself to be protected while in your van.
Does hire and reward insurance cover multi-drop deliveries?
Yes. Multi-drop delivery work is exactly what most hire and reward van insurance policies are designed for. Whether you're doing 10 drops or 100, your policy should cover you throughout your round.
Insurers usually ask the radius you work within while making your deliveries. Make sure this is accurate, so the exact area you cover is within the scope of your policy – especially if you work across a wide region.
Is hire and reward insurance mandatory?
Yes. If you're being paid to transport goods in your van, you're legally required to have hire and reward insurance. Standard van insurance – even comprehensive cover – won't protect you when you're working as a courier. And driving without the right cover is illegal.
If you’re involved in an accident while working, with a standard policy, your insurer would be entitled to refuse the claim entirely.
