Insurance for New Online and Delivery Businesses

10 June 2020 - Elizabeth Nichols

Delivery drivers have proved everyday heroes during the UK’s coronavirus pandemic. Social distancing and the demands of the stay-at-home public have led to a sharp increase in the UK’s courier population, along with a rise in deliveries by electric cargo bike.
New services like London’s ‘Pedal Me’, have had to diversify, after social distancing took away its taxi trade. Now, the business has blossomed and its environmentally friendly service has been delivering Personal Protective Equipment (PPE), making 400 daily food drops in Lambeth borough alone, and taking flowers to the door of around 240 homes a day.[1]
In the north of England, electro cargo bikes have become a regular sight on the hills around Todmorden in West Yorkshire. These bikes have been supporting Todmorden Indoor Market, as well as a local wholefood shop, spending 3-4 hours per day out and about.  In just the first 11 days after lockdown, 99 deliveries were made in 150 miles by electro cargo bike.[2]
Prior to the pandemic, the UK’s same-day delivery market was already contributing around £900m to the economy.[3] This economic sector could enjoy further growth after the coronavirus pandemic, due to many small food producers having quickly established online shops, so that they can continue serving their customers, even after lockdown restrictions come to an end.
Taking online food orders became somewhat of a priority for the farming community, after farmers markets were shut. Some producers established their own online presence, whilst others have opted to join networks such as the UK’s Open Food Network or NeighbourFood, a digital farmers market movement.  Sales to local communities quickly shot up by 300-400%.[4] The recognition that many members are now using technology to grow their business came as the food and farming charity, The Soil Association, announced its creation of an online selling discussion event in May 2020.
But amidst the necessity of quickly diversifying and evolving, some of the businesses which have gone online and embraced delivery services, may have overlooked the insurance they require.
Whether delivering food, flowers or other items by van, bike or some other means, the goods loaded need the protection of goods-in-transit insurance should items be lost or damaged through theft and accidents on the road, or should the service suffer some other form of loss.
A van load of goods can be a valuable cargo. Losing that cargo, without any insurance policy to claim upon, could be a major blow to cash flow and replacing the goods quickly may not be possible, which could lead to a loss of business, if the supplier then lets customers down.
But goods-in-transit protection is not the only cover to consider by anyone within the UK’s delivery ‘army’.  Other protections that may be required include public liability insurance. If you need to talk to a broker about insurance for your new online or delivery service, please get in touch.

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. COVID-19 is a rapidly evolving situation and changes are occurring frequently The information given in this publication is believed to be accurate at the date of publication shown at the top of this document. This information may have subsequently changed or have been superseded, and should not be relied upon to be accurate or suitable after this date.

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