What Insurance do I need as a New Haulier?

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Setting up in any new business may have its initial complications and headaches. The haulage business is no exception. Getting it right may mean the difference between success and failure of your business - or in the case of failing to get the most appropriate HGV insurance, a breach of the law.

Legal requirements

As with the use of any vehicle on British roads, the driver of a goods van, lorry or HGV needs to be insured to drive that particular category of vehicle. The minimum level of cover is required to meet any claims from third parties.

If you employ staff - whether as drivers or in maintenance or administrative capacities, you are almost certainly going to need employer's liability insurance.

Whilst on the subject of legal requirements you may also need to consider:

  • whether any of your vehicles is over 3.5 tonnes - in which case you are required to hold a haulage operator's licence, either restricted to the carriage of your own goods or a standard licence allowing you to haul both your own and others' goods;
  • if your haulage business is going to be engaged in the carriage of dangerous goods. If that is the case both you and your drivers may need to be aware of the current UK and European Regulations about such activities. Details may be found on the website of the UK's Health and Safety Executive;
  • the law also regulates the working hours of your drivers and requires the installation of a tachograph to ensure that the number of hours are strictly monitored - the penalties for failing to comply with these regulations may prove costly indeed (the UK's Vehicle and Operator Services Agency publishes a useful guide about drivers' hours and tachographs);
  • if your haulage business is going to be operating outside of the UK, there are still further laws, rules and regulations likely to apply to affect you and your drivers.

If you are thinking that this whole framework of laws and regulations has little to do with haulage insurance, you might want to reflect on the fact that a failure to comply with them may seriously affect, if not invalidate your insurance cover.

Insurance

By the same token, there may be many areas where there is no legal requirement for insurance but where your business may benefit from the protection this brings:

Vehicle insurance - although it may be relatively easy to meet the minimum legal requirements for the insurance of your vehicles, you might still want to consider increasing such cover to guard against the risk of accidental damage and the disruption to your business in the event of damaged vehicles being out of action;

Public liability cover - although many aspects of your operations as a haulage contractor may be covered by the insurance of the vehicles, you may still want to consider public liability indemnity to protect you from claims arising from visitors to your premises or members of the public or customers who are injured or suffer some other loss as a related to any aspect of your haulage operations - cover against such claims typically starts at a minimum of £1 million;

Professional liability - from the moment you set up your haulage business there are certain expectations, duties and obligations you assume in your relationships with your customers. To guard against claims that you have in some way breached your professional duty of care as a haulage contractor, you might also want to consider professional liability cover;

Goods in transit insurance - the whole subject of insuring goods in transit often emerges as a surprisingly complicated issue, particularly regarding the respective duties, obligations and responsibilities of the sender, you the haulage contractor and the eventual consignee (or addressee).

Specialist advice

It may be clear that getting off on the right foot in terms of insurance for your haulage business may be critical to your success or failure.

To help ensure that you arrange just the cover you need, and at a competitive price, you might want to seek the advice of a specialist insurance provider.

Eddie Johnson is an insurance industry veteran and HGV insurance expert who founded Isis Insurance-specialist commercial insurance brokers who are based in Cheshire, providing a bespoke service to growing businesses around the UK. Their insurance portfolio includes a wide range of insurance products, particularly those for businesses that operate heavy goods vehicles, such as HGV Insurance, Multi-Vehicle Insurance, Fleet Insurance, Goods In Transit Insurance and Employers' and Public Liability Insurance. Follow Eddie on Facebook or Twitter.

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