Furniture Delivery Business Insurance

Like any service provider, your business must protect itself and you against legal claims for damages coming from accidents, dissatisfied customers, as well as the risks to your assets through weather, theft and other such occurrences. For all of these, you should take out comprehensive Furniture Delivery Business insurance. Otherwise, you may place your whole future in jeopardy.

All businesses face financial and operational risks, some of which are entirely out of your control. The only way you can protect yourself in such cases is to have insurance.

It’s impossible to predict exactly what your risks are. Unexpected events can ruin your business and could even destroy your personal finances. But it’s easy to protect yourself at a limited and predictable cost. The basic reasoning behind insurance is “it is better to have insurance that you didn’t need, than to need insurance that you don’t have.”

Why are service providers like furniture delivery businesses especially vulnerable?

A business running a retail store cannot lose more than the value of its stock, but a service provider operates in a different mode. Your potential risks are open-ended when you provide services rather than are selling goods. There is no practical limit to your liability, as we will illustrate with a few examples.

Liability risks for service providers

General Liability risks for furniture deliverers

Every business faces a risk of causing injury or damage to third parties. Typically, a company will take out general liability insurance to cover itself against “trips and falls” claims that may arise when a visitor to the business premises is injured or some damage is done to their possessions.

For a furniture delivery business, the possibility of damages and claims is much wider, because the fundamental nature of the business requires you to spread your activities across many different exposures.

Also, there is no way you can block off the area in which you are working from public access, so the possibility of a public visitor interfering with your activity is much higher than for a retail outlet, factory or warehouse, restaurant or hotel. Finally, furniture delivery is heavy work and it’s only sometimes possible to clear the way for your activities.

General liability insurance covers you against claims made by members of the public that they suffered some damage or loss to their property, or injuries and even death. They could claim for the recovery of any damage done, or for the injury, medical costs, pain and suffering and any associated losses.

Such a claim would be very difficult to defend because of the dynamic nature of the whole furniture delivery operation. For example, imagine what could happen if a household member whose furniture you are delivering trips over some packaging or boxes left in a doorway or injures themselves trying to negotiate a way past your workers while they are shifting furniture around.

General liability claims can be massive, sometimes easily going over thousands of dollars even for property damage alone, and could go up to hundreds of thousands for a serious lawsuit involving personal injury. 

On top of a claim, you can also be faced with all of the legal costs involved for defense. In many cases, the cost of defense can easily outstrip the money involved in the claim itself, and it’s not unusual for a claim to be dismissed, which means that you won, but for the legal expenses to be left for each party to settle. In such a case, you have lost even though you won!

Professional Liability risks for furniture deliverers

A service provider, like any furniture deliverer, is offering specialist services and must be able to satisfy the customer’s needs and expectations. Particularly for your business that provides the services of furniture delivery to the public, there is greater risk of being sued.

Customers can claim that you were in some way negligent in the delivery of your services or made claims or promises that you did not properly supply what most other service providers would.

The claim can include you having misrepresented your abilities, promised but failed to deliver services, violated good faith, or acted with negligence, mistakes, errors, omissions, or work oversights.

Professional liability Insurance is also called E&O insurance. It covers your furniture delivery business in case a customer claims that you made some mistakes, errors or omissions when you were performing your services. 

Acting as a professional furniture mover on behalf of a customer means that your work comes with some implicit guarantee. It is that the work will be done with due care and diligence, that the agreed timetable will be properly adhered to and that you will do all necessary and promised actions.

Some other businesses that have to work in a similar fashion and that would also require professional liability insurance are Groundskeepers and Landscapers, Event Planners, Party Equipment Rentals, Errand services, Home Staging, Truck Driving Schools.

These share the same risks as a furniture deliverer because all of these professional services have a ‘duty of care’ that the services they will provide will be correct and match what they advertised or promised. 

A dissatisfied customer could claim that the services you performed were delivered without the necessary due diligence, care and attention. As well, a claim can be made that you lack the required levels of skill, or even that the service you performed was not what you undertook to do. In any such event, the dispute can end up in court.

Legal costs for your defense can be extremely high, and there is no certainty that the entire legal costs will be awarded to you even if the judgment goes in your favor. You could end up having to pay for some or all of the defense even if you win the case.

For both General Liability and Professional (E & O) Liability insurance, the most significant single benefit is that the whole process and cost of defending you against any claim is the insurance company’s responsibility, all the way up to the total limit of the policy.

There have been examples where a claimant was awarded a minimal amount, like $1, but the court ruled that each party had to bear its own costs. In such an outcome, the legal costs could be thousands or even tens of thousands of dollars, and so even though you effectively won the case, without liability insurance you would have had to fork out all of the costs yourself!

Asset Insurance

Furniture delivery businesses typically have considerable investments in assets, such as warehouses, business premises, dedicated vehicles, specialist equipment etc. For these, asset insurance is a must-have.

This is because of their value, and because in the event of some accident or damage caused by external events (storms, fires etc.) or man-caused events like vandalism or theft, you need to go out quickly to repair or replace the essential assets.

Unless you are sitting on enormous cash or bank credit, the only way you can step right out and finance the replacement is if your insurance company is right behind you backing your expenditure up.

Business Property Insurance

The investment in warehousing and building improvements can be one of the biggest assets of any furniture delivery business, whether you own the property or rent it. Especially if you are managing your furniture delivery operations out of a part of your home, you need separate commercial property insurance in place of the private home cover.

If a fire or theft were to happen, even if both your private section and the business section were equally involved, you run the risk of the whole claim being rejected unless you have a separate demarcated policy for each.

Office equipment and furniture insurance

In some policies, computers, office equipment and furniture like desks and filing cabinets etc. could be already protected under a standard commercial insurance policy. Check this with your insurance agent or broker, or talk directly to the insurance company.

Some companies exclude these in their standard commercial property policies, in which case, you should take out separate cover or negotiate a specific policy extension at an additional premium.

Equipment insurance 

As important as liability insurance, equipment insurance is an essential cover for furniture delivery businesses. 

The basic activity of collecting and delivering all sorts of furniture, whether on contract to a retailer when you are delivering their products to their customers, or on behalf of individual customers when you are moving furniture between premises, means you have to use your vehicles and your equipment to get around to customer sites, and to their own customer’s locations.  

You need to take out as much cover as it needs to provide protection in case of vandalism, breakage in transport and theft.

Business Insurance

Business interruption insurance 

Some unexpected event can force you to shut down your operations temporarily. Events outside of your control, like storms, floods, fires, and any disaster in your area may mean the normal operations are impossible.

This can even mean that it’s not something that directly affected you, but that switched off your flow of business, say for example if your main customer (a furniture warehouse or manufacturer) suffers a fire that forces closure for months.

This would totally stop income from your normal business activity, but you would still need to meet all of your business commitments, like mortgage payment, vehicle loan repayments, interest on loans and all the other built-in and unavoidable costs of being in business.

Business interruption insurance can protect by taking over all or some of these outflows if this happens. This will allow you to still stay viable until the levels of business return to normal.

Legally-required insurance

As well as the above covers that most businesses choose to protect themselves against the risks all businesses face, there are two types of insurance for which a business has no option, because they are required by state or federal law. For these, you need to take out at least the minimum of cover stipulated by legal requirements.

Remember, a failure to carry the mandatory or legally-required covers can result in serious financial penalties or even a criminal sentence and record. Your only option is to do so at the most competitive price.

Workers Compensation Insurance

Workers compensation insurance is a mandated federal requirement. In most states, individual insurance companies can provide the cover, but in six states, only nominated state-owned insurance bodies can provide the cover. If your business employs more than a specified number of full time, part-time, casual or sub-contract workers it is required to have this cover.

It covers them in any case of injuries or illnesses resulting from work-related events. Each state regulates the rates.

Commercial Vehicle Insurance

Commercial vehicle insurance is not the same as private auto insurance. The cover needs to be substantially larger, because commercial vehicles are on the road for more time, which makes them more likely to be involved in accidents. As well, multiple drivers adds a substantial level of risk.

A minimum level of vehicle insurance is legally required in all states except New Hampshire, which is the only one where you can instead provide proof of your business’s financial capacity to meet any possible claim arising from third-party accident claims.

In other cases, there are stipulations of the minimum level of cover required for both injury and damage. These will provide financial relief for victims of damages your vehicle causes in an accident. The amount of cover needed in most states usually reaches up to $1 million and could be even more for large trucks.

How much can you expect to pay for furniture delivery business insurance?

The likely costs of your furniture delivery business insurance depends mostly on the amount of the deductible that you have accepted (for all except General Liability cover). the size of your business, and whether you have a claim history from previous years.

In the table below, we have set out the main covers, together with guesstimates of the levels of cover and the cost. You should discuss your requirements with insurance agents and brokers. You could also let Google assist you in picking out the best match for your business.

• Low risk – Low risk generally means that you are delivering in a restricted area, and handling mostly small or medium sized items. 
• Medium risk – Working as the delivery service for retailers means that there is a higher level of movement, so there is a higher risk.
• Highest level – Working as a delivery service across large geographic areas, especially over state lines increases the levels of risk.

FAQ

Do I need commercial van or truck insurance?

For vans (light commercial vehicles weighing up to 3.5 tons), you need commercial van insurance. For a heavier van, it will be  classed as a heavy goods vehicle (HGV) and  needs truck insurance.

How can I make my commercial insurance cheaper?

Keep in mind that the cost of the insurance is a fixed and known expense, whereas the possible costs of claims coming from all of the risks that you furniture delivery business could face are totally out of your control and unpredictable. The most sensible thing to do in this case is to shop around with reliable and professional agents and brokers, who really do know best when it comes to getting the right deal for their customers.

What are the three most essential insurances that all businesses should have?

As we have set out above, a properly managed business must at the very minimum be taking out adequate insurance policies covering its expected risks in the following areas:

Liabilities (general liability against third-party accidents, professional liability against claims of incorrect or inadequate performance)

Protection of assets (against damage from fire, flood and also from theft or vandalism)

Mandatory covers (Workers Compensation insurance and third-party vehicle cover are legal requirements in almost all states)