Insurance Requirements in Last-Mile Delivery Contracts

Use the latest complete agreement, including its insurance exhibit and attachments. A sales summary, email, or older contract may leave out a required policy, document, or deadline.

Write down which business must carry the coverage, which vehicles and drivers it must cover, when proof is due, and how long the requirement continues. If the contract language is unclear, ask the customer or a qualified attorney. BLIS can compare a clear list of insurance requirements with your current policies and the options an insurer makes available.

Coverage names that may appear include commercial auto, general liability, motor truck cargo, workers' compensation and employers' liability, and umbrella or excess liability. A contract may ask for some, all, or different coverage, so let the current agreement—not a generic online list—set the checklist.

For each item, record the required limit, deductible, endorsement, certificate holder, proof format, and due date. If auto liability is shown as a combined single limit, that is one total limit for covered bodily injury and property damage. Split limits divide those amounts. Do not assume one format automatically satisfies the other.

For cargo, compare the requested limit with what the business may carry at one time, including peak periods. Then check the policy terms for covered property, causes of loss, deductibles, and exclusions. Meeting a number in the contract does not mean every cargo loss is covered.

A contract limit is a business requirement, not a statement of the legal minimum. State vehicle financial-responsibility rules may apply, and FMCSA insurance filings apply to certain businesses with federal operating authority. Federal requirements vary by entity type, authority, cargo, and vehicle. The rules that apply to one delivery operation may not apply to another.

A customer may request limits or documents beyond what a regulator requires. Treat those amounts as conditions of that agreement, not as a promise that the coverage is available or a recommendation that the limits are enough for every loss. Consider the route, vehicles, peak cargo, employees, contracts, and business assets when deciding what protection is appropriate.

If the contract asks for additional insured status, primary and non-contributory wording, or a waiver of subrogation, the actual policy endorsement matters. In plain terms, the customer is asking for specific rights or changes under the policy. Availability and scope depend on the policy and the insurer's approval.

A certificate is evidence of insurance; it does not amend or expand the policy. A customer can reject proof that shows the requested limits but does not include a required endorsement. Ask BLIS to compare the request with the policy and gather the insurer-approved documents that are actually available.

Workers' compensation rules vary by state, and a contract may add its own requirement. In Texas, most private employers may choose whether to carry workers' compensation, but employers without it have state notice and reporting duties. A delivery contract can still require coverage even when state law generally allows the business to go without it.

Calling a driver an independent contractor does not settle the legal question. California generally begins with the ABC test, subject to exceptions and other tests for specified relationships. Occupational accident coverage is not workers' compensation, and its benefits and terms are different. Confirm the business's actual working relationships with qualified legal and state resources, then make sure the insurance request matches that structure.

Review the insurance section while deciding whether the work makes financial sense. A higher limit, a different policy, or a new endorsement can take time to evaluate, and an insurer may not offer every requested term.

Before signing, confirm the agreement version, named business, vehicles and drivers, every policy and limit, required endorsements, certificate holder, proof format, deadline, and any ongoing renewal requirement. Compare that list with the current policy rather than relying on memory or an old certificate.

BLIS can compare the insurance schedule with your current coverage and identify questions to resolve before the start date. For a new route, begin the commercial insurance intake. If BLIS already services the policy and you need a certificate, email service@blisins.com. The parcel delivery insurance hub explains related coverage considerations.

National delivery platforms and local customers can each set their own contract terms. A current Amazon Delivery Service Partner agreement* or FedEx service-provider agreement* may differ from another program or an older version. Review the signed agreement and its attachments rather than relying on this article or another third-party summary.

Blue Lagoon Insurance Services, LLC is an independent insurance agency and is not affiliated with Amazon, FedEx, UPS, or any other parcel delivery service.