Running a delivery service means you're constantly moving—packages, products, people's livelihoods. And with all that movement comes risk. Your driver could accidentally damage a client's property while unloading. Someone could trip over a dolly at a customer's loading dock. A package you assembled could cause an injury after delivery. That's where general liability insurance comes in.
Here's the thing most delivery business owners don't realize until they need it: general liability insurance isn't about your trucks or your cargo—those need separate coverage. Instead, it's your safety net for everything that happens when you or your team are interacting with the world outside your vehicle. And if you're working with commercial clients, you probably can't even get in the door without proof of it.
What General Liability Actually Covers for Delivery Services
General liability insurance protects your delivery business against claims for bodily injury and property damage that happen because of your operations. For logistics and delivery companies, this coverage kicks in during scenarios that are surprisingly common.
Bodily injury coverage handles medical expenses and legal costs if someone gets hurt during your business operations. Think about your driver using a forklift at a client's warehouse and accidentally injuring a worker. Or a customer trips over your equipment while you're unloading at their facility. These aren't vehicle accidents—they're premises and operations incidents—and general liability covers them.
Property damage coverage protects you if your team damages someone else's property during the course of business. Your driver backs a dolly into a client's expensive glass door. You're unloading with a crane and accidentally damage the building's facade. Someone on your team knocks over a display at a retail delivery location. Your policy pays for repairs and legal defense if the property owner sues.
There's also products and completed operations coverage, which is critical if you do more than just transport. If you provide packing, crating, assembly, or pick-and-pack services, this covers claims that arise after you've finished the job. Maybe you assembled furniture that later collapsed and injured someone. Or you packaged goods improperly and they caused damage after delivery. This extension protects you from those post-service claims.
Coverage Limits You'll Actually Need
When you're shopping for general liability insurance, you'll see two numbers: per-occurrence limits and aggregate limits. The per-occurrence limit is the maximum your policy will pay for a single incident. The aggregate limit is the total your policy will pay for all claims during your policy period, usually one year.
For delivery services, the standard coverage structure is $1 million per occurrence and $2 million aggregate. This is often written as "1M/2M" in industry shorthand. These limits aren't arbitrary—they're what most commercial clients require before they'll do business with you. In fact, many logistics contracts won't even consider delivery partners without at least these baseline limits.
Some clients require even higher limits. If you're working with large retailers, manufacturers, or high-value logistics contracts, you might see requirements for $2 million per occurrence or higher. The good news is that increasing your limits doesn't double your premium. Going from $1M/$2M to $2M/$3M might only increase your annual cost by 20-30%.
One rule of thumb worth remembering: your general liability limits should reflect the potential damage your operations could cause, not just what feels affordable. If you're regularly on loading docks with expensive equipment or delivering to high-value facilities, higher limits make sense. The difference in premium is usually minor compared to the protection you gain.
What You'll Actually Pay
For delivery and courier businesses, general liability insurance typically costs around $191 per month, or about $2,300 annually. But that's just an average—your actual cost depends on several factors that insurers use to assess your risk.
Your location matters significantly. Operating in urban areas with higher costs of living and more expensive real estate usually means higher premiums because potential property damage claims are costlier. Your business size affects pricing too—more employees and higher revenue generally mean more exposure and higher premiums.
Claims history is huge. If you've had previous general liability claims, expect to pay more. Conversely, years of claim-free operations often earn you discounts. The types of services you provide also factor in—basic package delivery is seen as lower risk than services involving assembly, installation, or specialized handling.
Many delivery businesses save money by purchasing a Business Owner's Policy (BOP), which bundles general liability with commercial property coverage. BOPs for courier services average around $141 per month or $1,687 annually—often cheaper than buying policies separately. If you have a physical location with equipment, inventory, or office space worth protecting, a BOP usually makes financial sense.
Certificates of Insurance: Your Business Access Pass
Once you have general liability coverage, you'll frequently need to prove it. That's where certificates of insurance (COIs) come in. A COI is a one-page document that verifies your coverage, shows your limits, and confirms your policy is active. Nearly every commercial client will require one before letting you on their property or signing a delivery contract.
Getting a certificate is usually straightforward with modern insurers. Many providers let you generate unlimited COIs instantly through an online portal or mobile app at no extra charge. Some traditional insurers charge a small fee—typically $0 to $25 for routine requests, though expedited or complex certificates with special endorsements can cost $25 to $150.
Here's a practical tip: when a client asks for a COI, they'll often request to be named as an "additional insured." This gives them coverage under your policy if they're sued alongside you for an incident involving your operations. It's a standard request, but it usually requires a policy endorsement. Make sure your insurer includes additional insured coverage or can add it quickly when clients request it.
What General Liability Doesn't Cover
Understanding what general liability insurance doesn't cover is just as important as knowing what it does. The biggest gap for delivery services: vehicle accidents. If your driver causes a car accident while driving, general liability won't help. You need commercial auto insurance for that. This is non-negotiable for delivery businesses—you can't operate legally without it.
General liability also doesn't cover the cargo you're transporting. If packages are lost, stolen, or damaged in transit, you need cargo insurance or inland marine coverage. Similarly, if you own or lease a warehouse, general liability won't cover damage to your building or contents—that requires commercial property insurance.
Employee injuries are excluded too. If one of your drivers or warehouse workers gets hurt on the job, that's a workers' compensation claim, not general liability. Most states legally require workers' comp if you have employees, and many clients require proof of it along with your general liability certificate.
Professional errors and omissions aren't covered either. If a client sues because you failed to deliver on time or delivered to the wrong location, causing them financial loss, general liability won't respond. You'd need errors and omissions insurance or professional liability coverage for those claims.
Getting the Right Coverage for Your Delivery Business
The insurance market for delivery services has been challenging in recent years, with rates for commercial auto and general liability under pressure from rising claims costs. That said, general liability rates haven't increased as dramatically as commercial auto, and the market has started stabilizing.
When shopping for coverage, get quotes from insurers that specialize in transportation and logistics. They understand your industry's specific risks and often offer better terms than general business insurers. Look for policies that include products and completed operations coverage if you provide any value-added services beyond basic delivery.
Ask about additional insured endorsements upfront—most commercial clients will require them, and having them built into your policy from the start makes life easier. Check whether your insurer offers free, instant certificate generation. This might seem like a small detail, but when you're trying to land a new contract and need a COI immediately, it matters.
General liability insurance is foundational protection for delivery service businesses. It keeps you eligible for commercial contracts, protects you from expensive third-party claims, and gives you peace of mind when your team is out making deliveries. Combined with commercial auto, cargo coverage, and workers' comp, it forms the insurance foundation every delivery business needs. The investment is manageable, the coverage is essential, and the cost of going without it is simply too high.
