Plan Insurance Blog

Amazon Contractor Insurance Solution

The recent C-19 lockdown resulted in a boom in delivery work as consumers were forced to stay at home and order online. The increased demand is likely to remain as the coronavirus crisis accelerated the trend of shoppers shunning the high street and browsing the web instead. Many aspiring courier firms are seeing this as an excellent business opportunity. The entrepreneurial amongst them are securing contracts with online retail giants such as Amazon and large logistics companies in the form of; Hermes, TNT and Yodel.

What Motor Insurance do I need to do deliveries for Amazon?

Amazon drivers need a flexible motor policy that will provide insurance cover for amazon courier work and they are also likely to want it to cover deliveries for other contractors. We’ve seen high volumes of enquiries from businesses seeking amazon contractor insurance for their individual or fleet of vehicles. With cash flow always a pressing concern for fledgeling companies, especially during the crisis, proposers have long been pushing for a more fluid insurance product that can better handle the ebb and flow of demand.

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Exciting New Amazon Contractor Insurance Product Launch

Plan Insurance Brokers are very pleased to be one of a handful of brokers that have access to a new insurance product that is perfectly designed for the demands of amazon courier contracts. Launched with excellent timing to assist the many start-ups entering the courier space following the coronavirus outbreak, the recently released solution is proving incredibly popular already.

This innovative fleet product helps businesses by charging them for the exact mileage that their vehicles do. The model works by charging a small monthly amount per vehicle and this goes towards covering the vehicle against risks such as fire, theft or vandalism etc whilst the vehicle is parked. Then there is a separate invoice which covers the on road use i.e. the mileage of each vehicle at a fixed rate.

We should point out that although we’re discussing the product here specifically in relation to Amazon Courier Insurance contracts, it is still available for a host of other fleet uses and business sectors if required. Therefore, in the situation, we currently find ourselves in which many companies are not able to fully utilise their vehicles, it can save them hundreds and in some cases tens of thousands of pounds.

Amazon Contractor Insurance Case Study

For a real-life example of this product in action is, we recently insured a courier firm that fulfils amazon contracts. They were charged £30 per vehicle a month, and then £0.09 a mile. They estimated their vans do around 20,000 miles a year, which on this model equates to a yearly cost of £2,160 per vehicle:

£30 x 12 months = £360
£0.09 x 20,000 miles = £1,800

Total = £2,160

However, to insure the vehicles on a more traditional basis, they were being offered quotes in excess of £3,000 per vehicle. Making this pay per mile model over £800 a year cheaper per vehicle. With over 45 vehicles used in their operation, the company were over the moon to generate a potential saving of approximately £37,000!

Since this pay per mile courier model is based on a monthly declaration, it comes with many benefits:

  • It means businesses do not have to find large amounts of capital to pay for their insurance upfront
  • It means firms do not have to take out costly finance agreements to pay for their insurance
  • It means that when trade is slow and vehicles are not moving, the cost of insurance is dynamic and reduces in line with low demand

It’s worth pointing out that the insurer in question is happy to work with numerous makes/models of tracking systems, many of the technologies are low cost to install and simple to maintain. They also do not monitor driving behaviour and the pricing is not based on telematic reports other than the distance covered.

The image below should provide further clarification… (Click on image to see full-resolution version)

amazon contractor insurance

Other Amazon Contractor Insurance Options

In addition to this pay per mile product, we also have another fleet product that is popular with amazon contractors. Although there are no mileage considerations, like the aforementioned product; the main attraction instead is that it is a monthly renewable product. It is based on a fixed monthly price guaranteed for 12 months.

This is a great product for new businesses which have no credit history or businesses which might have an adverse credit history and are therefore unable to arrange any finance towards their insurance premiums. However, other benefits to this product are the ability to walk away at any given month with no penalties and also only pay for the vehicles used during that month. Which could appeal to all businesses, not just those with credit issues.

Hopefully, the above information on these two offerings has proved of use. If you’re a fleet manager for a courier firm looking for amazon contractor insurance and want to learn more please feel free to get in touch. We can also advise on risk management and include a host of free tools and documents with our insurance service to assist with the smooth running of your fleet.

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