Courier or Delivery Company Insurance After You Buy

A new courier or delivery owner needs four things in force on closing day, in your company's name: commercial auto that reaches every van and driver, cargo coverage for customers' parcels, workers' compensation for drivers and loaders, and liability and property cover for the depot. The seller's policies do not simply move to you, so the first job is to find out which vehicles, drivers and parcels each one actually reaches. This guide is for buyers who have just closed, or are about to, and want a first-weeks list.

The short answer

Auto is the main exposure. A crash is often a courier's biggest liability, and it sits on a commercial auto policy, not on general liability or a business owner's policy.
Packages need their own coverage. The general liability form generally excludes property in your care, custody or control (property you are holding for someone else), so customers' parcels usually need a cargo form, and parcels held overnight in a depot may need another.
Vehicles are the first thing to reconcile. Owned vans, leased vans, rentals, drivers' own cars and contractor-supplied vehicles are each treated differently, and the standard business auto form has no automatic cover for a newly acquired company.
Workers' comp is priced on payroll and class, and driver classification is the big cost question in this industry.
Ask for written proof of the effective date. A quote or a request to a broker is not coverage until the insurer binds it.

Which policies does a courier or delivery company need?

Delivery businesses move other people's property in vehicles on public roads, with employees who lift and drive all day. The table matches each exposure to the policy that usually answers it, with the courier-specific question to ask. Wording varies by carrier and form, so put these questions to your broker with the actual policy in hand.

Courier and delivery exposures and the policy that usually answers them
Exposure	Usual policy	The courier question to ask
A van injures a pedestrian or damages a car	Commercial auto liability	Which vehicles count as covered autos, and is every driver on the list?
Your own vans are crashed, stolen or burned	Auto physical damage	Are values current, and does the lender appear as loss payee?
Rented vans, drivers' own cars, contractor-supplied vehicles	Hired and non-owned auto	Does the policy apply to each type, is it liability only or also physical damage, and does the carrier limit regular use of drivers' own or contractor vehicles?
Customers' parcels lost, stolen or damaged in transit	Motor truck cargo (legal liability)	What is the limit per vehicle, and how does it treat theft from an unattended van?
Parcels held overnight at the depot	Cargo, warehouse legal liability or a property extension	Which form answers for goods inside the building?
Customer or visitor hurt, or property damaged, at the depot	General liability	Does it fit the contract wording customers use?
Door or floor damaged while carrying a parcel in from the van	General liability or commercial auto, depending on the forms	How do both forms treat loading and unloading, and who answers at the doorstep?
Driver strains a back or falls at a customer site	Workers' compensation	Which class applies, and who is on payroll?
A crash that exceeds the primary auto limit	Umbrella or excess	Does it sit over auto, and does it meet customer minimums?
Fire at the depot stops routes	Property and business income	How long is the waiting period, and are scanners and shelving scheduled?
Cash on delivery, employee theft, fraudulent payment requests	Crime	Does it reach customers' property, and what is the cap on tricked-payment losses?
Routing software, proof-of-delivery photos, recipient data	Cyber	What triggers it, and does the earliest-covered date still go back far enough?

What has to be in force on closing day?

Most of the list has to be in place when you take over, not a month later. Your lender and investors will ask for proof of coverage in the first update, so treat this list as its first page.

Auto. The standard Insurance Services Office (ISO) business auto form has no automatic cover for a company you acquire. Whether a van is covered depends on the policy's covered auto symbols (codes that say which vehicles count). A company with no auto policy of its own has nothing for newly acquired vehicles to attach to, so bind a policy in your company's name before the first route runs.
General liability. The standard ISO form can extend automatically to a newly acquired organization for up to 90 days (or until the policy ends, if sooner). It does not apply to a partnership, joint venture or limited liability company (LLC), or if other similar insurance is available to the organization, and it does not cover injury or damage from before the acquisition. Many buyer entities are LLCs and other forms differ, so do not count on it. A first-time buyer with no liability policy has nothing for the clause to attach to. Check the actual wording.
Transfer. Standard policy conditions say the insured's rights and duties cannot be transferred without the insurer's written consent. In an asset purchase the seller's policies do not simply move to your new company, and vans titled to the seller's company may need new titles or lessor consents before the new policy lists them.
Workers' comp. Workers' comp policies in most states carry a requirement to report an ownership change to the insurer within 90 days, and an asset buyer needs its own policy or arrangement effective at closing. See workers' comp, payroll and class codes for a courier.
Lender. For a Small Business Administration (SBA) 7(a) loan, the lender must see hazard insurance on pledged assets, and equipment and vehicles pledged as collateral usually need a lender's loss payable clause. Name the lender as loss payee on every financed van and on pledged scanners and handhelds. Leased vans carry the lessor's terms instead. See SBA lender insurance requirements.

Whether to keep the seller's program for a short bridge is a deal-structure question. Keep the seller's insurance or start over walks through it.

Which vehicles will the policy actually cover?

This is the reconciliation that matters most in week one, because delivery fleets are rarely one kind of vehicle.

A hypothetical example. A buyer closes on a delivery company that runs 30 vans on a typical day. Eighteen are titled to the company, six are leased, and six belong to contract drivers who use their own vehicles. The company's auto policy lists the eighteen owned vans on its schedule. Three weeks in, a driver in a leased van that was never added to the schedule backs out of a driveway and injures a pedestrian. The first questions are about the policy, not the injury: what the covered auto symbol is (the code on the policy that says which vehicles count), whether leased vans count as owned or as hired, and whether the contract drivers' vehicles are covered at all. A buyer who reconciled the vehicle list against the policy in week one would have found the gap before the pedestrian did.

In plain words: a hired auto is one you rent or lease. A non-owned auto is one you do not own that is used in your business, such as a driver's own car. Hired and non-owned cover is usually liability only, so physical damage to a rented van is a separate question, and carriers may limit regular use of drivers' own vehicles. Contractors are often asked to carry their own commercial auto policy. Ask your broker to show you the symbol and the wording for each vehicle type.

Do the same for drivers: an inherited list often includes people who left and omits people who joined. Commercial auto review for new owners and vehicles titled to the seller cover the mechanics.

Does a federal insurance minimum apply to your vans?

It depends on the weight rating of each vehicle. Federal rules set a minimum of $750,000 of public liability for for-hire carriers of non-hazardous property in interstate commerce. It applies to vehicles with a gross vehicle weight rating (GVWR) of 10,001 pounds or more (the maker's maximum loaded weight), which can include box trucks and some heavier vans. Some hazardous loads carry higher minimums. Vehicles rated below that weight are generally outside the schedule, though states may set their own rules and a local leg of an out-of-state shipment can count as interstate. The published rule text carries a July 2026 amendment note, so confirm the current figure and what is in force with the Federal Motor Carrier Safety Administration (FMCSA), and treat any minimum as a floor, not a sign of adequate limits. Contracts, permits and bonds for a courier covers filings and permits.

What should I check about vans, drivers and parcels in the first four weeks?

Work through this list in order. Each item is a question for your broker, carrier or the seller.

Day one. Get written confirmation of the effective date and time of each policy. A quote, an application or an emailed request is not bound coverage.
Week one. Reconcile the vehicle and driver lists with the schedules. Ask how rentals, drivers' own cars and contractor vehicles are treated.
Week one. Pull the five years of loss runs for auto, cargo, general liability and workers' comp, and the current experience mod worksheet.
Week two. Read the cargo form for limits per vehicle and per loss, and for its treatment of theft, unattended vehicles, high-value items and delay.
Week two. Read the three largest customer contracts for insurance clauses. Check customer contracts against your policies shows how.
Week three. Read the depot lease for insurance and waiver terms, and check the lender's loss payable wording on vehicles and equipment.
Week four. Confirm payroll estimates, driver classification and the status of any contractor drivers with your workers' comp insurer.
Week four. List every permit and registration and who holds it. See the first 90 days.

Morrow can review the declarations pages, loss runs and customer contracts you inherited and flag mismatches. It can request quotes, but any terms come from carrier underwriting.

What can a seller's program miss once you add routes or customers?

Owner-run delivery companies grow route by route, and the insurance can stay a step behind. A seller's program can be sound and still miss what you plan to do. For a courier the usual misses are rented, leased or driver-owned vans that were never added, parcels held overnight in the depot, peak-season rentals and temporary drivers that the original estimates left out, and customer contract wording the policies do not carry. List what you plan to add in year one and ask your broker which policy each item would change. Insurance gaps in a courier or delivery company shows how to spot each one.

Tell your investors and lender what you found and what you changed. A one-page summary of policies, limits, renewal dates, vehicle and driver counts and open items works better than a stack of declarations pages. Insurance reporting to investors has a format.

Keep reading

Frequently asked questions

Do the seller's insurance policies cover my courier company after I buy it?

Not automatically. Policy rights generally cannot be transferred without the insurer's written consent, and in an asset purchase the seller's policies stay with the seller. In a stock purchase the policies stay with the company, but the insurer may need to be told about the ownership change. In an asset deal, get your own coverage bound before closing. In a stock deal, confirm in writing with each insurer that the existing policies continue after the ownership change, and on what terms.

Does my general liability policy cover packages I am delivering?

Generally not. The standard general liability form excludes damage to property in your care, custody or control. Customers' parcels usually need a motor truck cargo form, and goods held in a depot may need a warehouse or property extension. Read the actual forms.

Do I need commercial auto if my drivers use their own cars?

Yes, the company needs its own commercial auto policy. Personal auto policies often exclude business delivery use, and hired and non-owned auto coverage is usually liability only and may be restricted where drivers use their own vehicles regularly. Contractors are often asked to carry their own commercial auto policy instead. Ask your broker how each vehicle type is treated.

Does the federal $750,000 minimum apply to my cargo vans?

Only if you are a for-hire carrier in interstate commerce with vehicles rated at 10,001 pounds or more, and you should confirm the current figure with the Federal Motor Carrier Safety Administration (FMCSA), because the rule text was amended in July 2026. Vans rated below that weight are generally outside it, but states and customers may set their own requirements.

How soon after closing should I review the insurance?

Before closing for the policies that must be in force on day one, and within the first 30 days for the rest. Reconcile vehicles, drivers, cargo limits and customer contract requirements first.

References

Just bought a business? Get your insurance reviewed.

Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.

Request a review Check a contract

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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.

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