TIMOCOM Start-Up Blog: What insurance do I need to start a transport company?

If you’re starting a transport company, you will need insurance to protect your business.After all, if a damage claim is made, or there is a legal dispute, the resulting costs can quickly put your company at risk. Haulage and logistics insurance had a significant rate increase in 2017 and premium rates are stabilising at this higher level.

With the general rise in costs for freight forwarding companies, you don’t want to spend a lot on insurance but you still need to be covered to protect your business.

But what transport insurance do you need and how do you find the right one?

Why transport company insurance is important

Transport companies are legally responsible for ensuring goods make it safely from one place to another.

If the goods go missing, are damaged, or anything else happens to them, you need to reduce your financial risk if a claim is made against you.

All transport is also subject to national and international laws which also dictate how you conduct your business, which means having transport company insurance.

As a freight forwarder, you are entitled to limit the amount you are liable for as long as these conditions have been accepted beforehand.

What is transportation business insurance?

Transportation business insurance covers your business, just like any insurance, should anything go wrong. It protects you from financial risk which could be detrimental to your business.

Who needs insurance?

If you are a startup, a freight company, or deal with logistics in any way, you need to have insurance to reduce any risk to your business should something go wrong.

What transport insurance covers

What your transport company insurance covers will depend on the type of insurance policy you get.

But there are some circumstances where no transporter insurance will cover you such as for losses caused by terrorism.

You must ensure the trading conditions are made clear to your customer otherwise it could invalidate your insurance.

As a new company, it is important to consider, in advance, what risks and expenses you need covered.

What insurance does your logistics business need?

Every business must have employer’s liability insurance and vehicle insurance, but the rest is up to you to choose.

Liability insurance for transportation companies

This insurance protects you if you or your employees are responsible for personal injuries, property damage or financial loss. 

This type of damage may arise from something as simple as a lost key belonging to a customer or accidental damage that occurred while loading or unloading goods on your property or data protection violations.

Liability insurance does not cover the goods as this is usually the responsibility of the buyer or seller.

Disability insurance

Disability insurance protects you if you should become disabled or too ill to work.

It makes sense to invest in disability insurance to protect yourself from loss of income in the event that you are no longer able to work. 

Just imagine that, because of illness or disability, you are no longer able to perform all aspects of your job. This could affect not just you and your family, but also your employees and customers. 

If you plan to become a self-employed HGC driver or vehicle operator, you are at much higher risk of not being able to work in the future.

Sitting for hours at a time, stress caused by ensuring goods are delivered on time, physically demanding work loading and unloading goods, not to mention dangerous traffic situations – it’s all just part of the job, which is why in some countries, drivers are classed as high risk.

Additional accident insurance may make sense for self-employed drivers but what this transportation insurance entails varies greatly between providers.

You should pay close attention to the types of accidents covered and what services are included in the event occurring.

Legal expenses

As a logistics industry professional, you will be dealing with a variety of different parties, which over time, can lead to disagreements. You will be renting commercial property, signing contracts with customers and partners. Even a problem with your own employees can lead to a legal dispute.

Legal expenses insurance generally covers costs for legal consultation and hiring lawyers, court appointments, surveyors, and experts.

Vehicle transport insurance and cargo insurance requirements

As with any car, vehicle insurance for your fleet is mandatory and should be matched with your cargo liability insurance plan. 

This usually covers a fixed amount of money. If a transport order involves transporting goods worth more than this fixed amount, then you must have additional insurance to cover the extra. 

Accident loss claims

Even the most professional businesses will have to deal with damaged goods and accidents.

The best course of action is to react quickly and professionally whether you are dealing with an accident involving hazardous materials or load theft.

The quicker you contact your freight forwarding insurance policy holder, the quicker they can act to limit the damage.

How do I choose an insurance policy?

If you go a long time without making a claim, you want a policy that ensures the insurance company will refund a portion of your payments.

Another important factor when choosing the right insurance policy is the administrative effort required.

Many providers offer digital solutions, so that you can make any changes directly online and quickly adjust the policy as needed.

You will be able to get a policy from a wide range of brokers, but it is recommended to choose one who is experienced in your industry.

Affordable transport insurance

At TIMOCOM we help you with every aspect of your transport business, including finding the right insurance for you via our Marketplace.

We work with the SCHUNCK Group to get you covered with just a few clicks. You can select transport insurance for each individual cargo which saves you money.

Choose any type of insurance cover that suits you best starting from just €5.49.

It’s easy to register by visiting the Marketplace.

Select the freight offer and click on “insure freight”.

You will be directed to SCHNUCK’s website to register and select the premium that is right for you.

Download your insurance policy immediately and you can get on with what you do best.

To start your free trial, apply using this form, in 2 easy steps.