Saturday, February 18th, 2017

Insurance & Bonding, Part 2: Bonding

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Continued from Insurance & Bonding, Part 1: Courier Insurance

Bonding is often mistaken for courier insurance, but is a radically different issue. Bonding is simply a sort of insurance taken by the business owner in the event that a crime is committed by an employee of the courier service. Courier insurance will cover the replacement costs of the goods should they be lost or stolen during transit.

For example, let’s say that a medical center hires the courier service to transport a container of highly controlled drugs. On the way to the location the driver decides to remove some of the medicines, and the loss is discovered a day or two after the delivery. While there will be legal and financial implications around such an event, the fact that the courier service owner is bonded will automatically allow the client a full financial reimbursement for their losses.

Do you need to be bonded? It all depends upon the types of goods your courier service transports, and the viability of any theft occurring. If you are a self-employed courier who would never consider tampering with any client parcels it is not likely that bonding is going to be necessary in the least.

If, on the other hand, you find that you must entrust some of your deliveries to subcontractors or seasonal employees with whom you may not have an extensive history, then it might be a wise idea to purchase some bonding.

Bonding provides you with a two-fold level of coverage because your clients can be absolutely assured that they are under no financial risks when their packages are in your hands, and that there is no issue for which your courier company is going to be financially liable as well.

In many cases, bonding and courier insurance will qualify as tax-deductible business expenses.

  • Sim

    Hi would just like to check as a courier company owner, what insurance should i purchase to ensure my drivers/bikers are covered during their working hours from accidents

  • 日は「あなたのイエスはあなたのイエスとするしないし、あなたの何のないあなたのこと」。多数によって読み取られる単語を解除する作家| とのを信じて、信頼関係が整合性に基づいて構築されているビアを介してに関しては、得られるいくつかのことです。

  • Brent Kipp

    Thanks! This page has been very helpful.

  • Ron

    How do I assure a courier employer that I am “bondable” with his insurance?

  • Al

    I am starting a courier service would you send me some sample letters/postcard of introduction and a list of potential clients.. Thank you

  • Jared

    Sam,

    In reference to “Bond,” what does Bond actually cover in the event of a crime? I understand that Courier Insurance and Bonding are similar items that act differently, but nothing was said specifically about Bond. Your last sentence in the first paragraph does mention that the Courier Insurance will cover the replacement costs of the goods should they be lost or stolen during transit. Is the term “Courier Insurance” in this context actually supposed refer to “Bonding?”

    Thank you in advance for clarifying and specifying.

    Be blessed!

  • Mr.B

    The reason for visiting this site is because I am thinking of entering the courier business as either an owner or an employee. Insurance Indemnification and Bond, is important, no question about that. I am not a problem solver, I am a problem avoider, therefore risk management, starts right here and now.
    Very good website. I am glad to have visited. Keep up the good work.

  • I am thinking about opening a Concierge business. Like taking people to store or cleaning there house or take them to doctor. What kind of insurance do i need.? Also do i need a license for this kind of business and a tax id number?

    • Karla,

      Whether you need a license, business structure, and tax id number all depend on where you are and your specific situation.

      Licensing is a geographic issue, determined by your local governments (city, county, state);
      Insurance will depend on what, specifically, you will be doing/transporting, and will be determined by a commercial auto insurance agent (not a personal auto insurance agent);
      A TIN (tax identification number) will be necessary if you structure your business as anything other than a partnership or sole proprietorship, which is something you should talk with a lawyer about.

      Best of luck,
      Sam

    • Karla,

      Whether you need a license depends on your particular area — your best bet is to contact your local chapter of the Small Business Administration, they can point you in the right direction to find the answer.

      As far as insurance goes, we really recommend you talk to a commercial insurance agent who can advise you about your particular situation. There are many factors that need to be considered.

      If you create a business entity like an LLC or a C or S corporation, you’ll need a Tax ID number, but that only takes a few minutes on the IRS website.

      Best regards,
      Sam

  • sam

    name some good and reasonable insurance companies who insure courier businesses..

    • Sam, that depends on what kind of insurance you need. But certainly you’ll want to differentiate between personal auto, business auto, and business liability insurance. Each of these could potentially come from a different provider, though you would likely find a provider that can cover both types of business insurance. I don’t want to explicitly endorse any particular insurance companies, but you should be able to talk to an insurance agent in your area who can refer you to a business insurance provider.

  • clyde

    hi sam,

    do you have written sales letters or post cards that can be mailed out potential clients ? if so,
    will you please email me a copy. i currently deliver medication for a courier company, and i want to start developing my own clients.

    thanks, clyde

  • I had movers move belongings from georgia to nevada and they brought things after splitting loads up. we were told they would have no problem bringing them and after several phone calls they finually brought 2 loads and still we do not have all our belongings. They have been paid in full and we are wondering how long do we give them to deliver everything before turning to a claim for lost items. They put a date of delivery down for flex and after each delivery we have to call them to ask when we can look for the remainder of our things. We get told they will have to make some phone calls and get back to us. Please let us know.

  • Michael Duggan

    In regards to Bonding , if you decide to get bonded make sure you have good credit. Bonding is based on Amounts that you want and your personal credit if the corportaion has no credit be propared to shell out some green backs.

  • van

    Hello,

    Can anyone be bonded?

    thanks
    van

    • Van,

      Bonding is a form of insurance, so unless you’ve given the insurance company reason to believe you are un-insurable, you shouldn’t have a problem.

      Just like with car insurance, however, the bonding companies may refuse to insure you if you have have consistent problems in the past.