When Would Your Business Need Haulage Insurance?
One of the big parts of any business is ensuring you have the right insurance in place. We all hate paying it and hope we never need it but having the right policy in place could be massive if you ever do. Haulage insurance is one area that can be a little confusing – when do you need it? Here we look at when a business needs haulage insurance.
What is haulage?
The definition of haulage is when you transport goods or items belonging to another person for a fee – also called hire and reward. It differs from where you are using an HGV to transport your own items from a yard to a site, such as plant, materials and equipment.
For insurance purposes, showing exactly what you use the vehicle for is very important and incorrect information can lead to a policy being voided and may leave a business with a big bill to pay to cover damages. The top reason that businesses run into this problem is that they get confused about the difference between carriage of own goods and haulage of someone else’s.
Haulage insurance normally applies to larger vehicles, over 3.5 tonnes. To operate a haulage business, you also need to have a haulage license.
Keeping the costs down
Once you establish that you need haulage insurance, then you want to keep your policy correct but also your premiums as low as possible. The biggest single discount to any type of insurance comes from No Claims Bonus or Discount (NCB or NCD). This is accrued over the years as you have a policy of this type and don’t make a claim, just as it does on car insurance.
What the vehicle is used for specifically can help reduce premiums, such as where the business only carries out haulage within the UK. This allows you to specific this use on the policy and can reduce premiums. Restricting who can drive the vehicle also helps reduce premiums, especially if they have a clean driving record and no claims. Any driver policies are always more expensive as they are a higher risk – anyone with the right driving license can drive the vehicle.
Excess is another area that can reduce a premium but you should always balance this with the business’s ability to pay if there is a claim. You could take an additional voluntary excess to reduce premiums but remember, you would have to pay this out if you made a claim.
To qualify for haulage insurance there should be no more than three drop offs on any route. If your business involves making a larger number of stops on each trip, then you may need courier insurance. Parcel delivery businesses are one such example, where multiple stops are a daily routine. Courier insurance is usually a little more expensive than haulage due to the nature of the risk but again, being covered correctly is always cheaper in the long run.