Whenever you are buying a business, one of the costs you need to figure out is the type and amount of insurance you will need. Independent route owners are no exception. There are a few kinds of insurance for FedEx Ground Route owners and a couple of others that might be optional.
Types of Insurance
The two primary types of insurance every independent FedEx delivery route owner needs are vehicle insurance and general liability insurance. Underneath these can be several other types of insurance. Some of them are essential, and others might be good to have depending on your situation.
The first is much like your personal car insurance, only a bit more robust. We’ll talk about the types you need in just a moment.
The second, general (also called commercial) liability insurance covers you in case of certain events where your business might be the target of a lawsuit. There are some additional insurance types that fall under this category as well.
Commercial Vehicle Insurance
When it comes to insurance for FedEx Ground Route owners, vehicle insurance could be one of the first things to come to mind. Just like with your personal vehicles, you need insurance on the vehicles you deliver packages with. And much like your personal insurance, you can choose between liability coverage that meets your state requirements or full coverage insurance. You can also choose your levels of coverage.
For instance, if you want to save money on monthly costs, you can choose a liability policy that meets your state’s minimum requirements. However, for most business owners, this is not enough. If something catastrophic were to happen, you could be liable for greater damage than your insurance would cover. Also, this can affect your ability to get insurance in the future.
In this case, consult with an insurance professional to determine your coverage needs. The same is true for collision insurance. You can choose to “self-insure” your vehicle if it is damaged in an accident where you are at fault. However, you will be responsible for replacing that vehicle, so you need to ensure that you have adequate cash to cover those expenses so you can get back to delivering right away.
The more routes you own, the higher the cost of this “self-coverage.” Also, note that if your vehicles are financed, you may be required by your lender to carry certain types of vehicle insurance.
It is also worth noting that glass coverage and even extended warranties can be considered additional insurance when it comes to covering maintenance costs, but if you do have to replace a windshield or endure a major repair, both can be well worth the additional monthly cost.
General Business Liability Insurance
The second type of insurance for FedEx Ground Route owners is general business liability. This covers things like your own injuries that might occur when at a delivery or pickup location, or if someone were to slip while helping you lift something onto your truck, for example. (This is something you should avoid if at all possible).
It also covers any other situation where you might be liable: if freight is damaged while on your truck, for example (more on that next). In fact, there are a number of situations where this kind of insurance comes in handy.
The best idea is to consult with an insurance professional, including about optional insurance.
Inland Marine Coverage
Originally designed for ships carrying cargo, this insurance was later expanded to cover any kind of cargo transportation, including last-mile delivery. When it comes to insurance for FedEx Ground Route owners, this is optional, but it can be extremely desirable. It also will cover your own handheld computer and electronic devices you might use on your route.
This comes into play if a customer claims a package was damaged while in transit on your truck. Whether this is from a vehicle accident, spillage from another package, or dropping something while in the process of delivery, Inland Marine insurance has you covered.
Again, consult with your insurance professional to determine what is right for you. While covered as a separate type of insurance, this is usually included as part of your general liability policy.
What about Workmans Compensation?
Most of the time in most states, any drivers who work for you (including yourself) operate as independent contractors, and as such you don’t have to carry workmans comp (as it is commonly called) insurance for them. However, if you are in a state where your drivers are actually your employees, you need to carry this kind of insurance.
Some FedEx route owners choose to make their drivers employees anyway, and that is a choice you will need to talk over with your accountant as well as your insurance agent if you decide to go that direction. There are some tax benefits, but some additional costs as well.
Insurance for FedEx Ground Route owners is pretty easy to get and understand. But it is a cost you need to figure into your regular expenses if you purchase a FedEx Ground route. Do you have more questions, or are you ready to find the right route for you at the right time? Contact us today at Route Advisors. We’ll be with you every step of the way.