Cargo, Auto & GL: The Three Policies Every Delivery Contractor Needs

By Tamir Lerner · Last Mile Delivery Insurance · Updated July 2026

Why three policies instead of one?

New delivery contractors often assume a single "delivery insurance" policy covers everything. It doesn't. Insurance is built in layers, each designed for a specific kind of loss, and delivery work creates three very different exposures: the driving, the interactions with people and property off the road, and the packages themselves. No single policy handles all three, which is why the industry standard for a FedEx Ground ISP, an Amazon DSP, or an independent courier fleet is a coordinated stack of coverages.

Think of it this way: commercial auto protects the road, general liability protects the ground, and cargo protects the freight. Leave one out and you have a hole a claim can fall straight through.

Policy 1: Commercial auto

Commercial auto is the foundation and the largest cost for almost every delivery contractor. It responds when one of your vehicles is involved in an accident, paying for bodily injury and property damage your business is liable for. Because delivery vans are on the road all day making constant stops, this is your highest-frequency and highest-severity exposure.

Delivery programs know this, which is why they set high requirements. FedEx Ground ISP and Amazon DSP agreements commonly require a $1M combined single limit — confirm your program's current requirements — and typically name the program as an additional insured. Two related coverages usually ride alongside auto liability:

• Auto physical damage — repairs or replaces your own vans after a collision, theft, fire, or weather event. Lenders and lessors require it.
• Hired & non-owned auto — covers business liability when a driver uses a personal car or a rented van for the route.

Policy 2: General liability

General liability (GL) covers the claims that have nothing to do with a vehicle collision. A package left on a doorstep that someone trips over, damage to a customer's landscaping, or a bodily injury claim that arises while your driver is off the truck — these fall to GL, not auto. Delivery puts your people on hundreds of private properties every day, so this exposure is real even though it is easy to overlook.

GL is relatively inexpensive for the protection it provides, commonly written at $1M per occurrence and $2M aggregate, and it is a standard requirement in most delivery program agreements. Like auto, it is frequently endorsed to name the delivery program as an additional insured.

Policy 3: Motor truck cargo

Cargo coverage protects the goods you are carrying while they are in your care, custody, and control — in transit and often during loading and unloading. If packages are damaged in an accident, stolen off the van, or lost to a fire, cargo coverage pays for the freight. For a last-mile operation moving hundreds or thousands of packages a day, a single bad loss can be significant, and neither auto nor GL pays for the cargo itself.

Some program agreements specify a cargo limit and some leave it to you, but carrying it is a smart, low-cost safeguard either way. Match the limit to the value of what you typically haul.

How the three policies work together

Each policy has a lane. Coordinating them — ideally through one broker who understands the delivery service partner model — keeps the limits, endorsements, and additional insured wording consistent so nothing falls between the cracks at renewal.

What about workers' compensation?

If you employ drivers, workers' compensation is the fourth pillar and is required by most states from your first hire. It covers your drivers' own on-the-job injuries — the medical bills and lost wages — which none of the other three policies address. Delivery is physically demanding, so comp is not optional in practice, and programs generally require proof before drivers can work.

What does this cost?

Bundled together, most small and mid-size final-mile fleets see total insurance costs in the rough range of $8,000 to $16,000 per van per year across all lines, with commercial auto making up the largest share. These are planning ranges, not quotes — your actual price depends on driver records, fleet size, payroll, location, and claims history. Bundling all lines with one broker is usually the most cost-effective and compliant approach.

For federal context on commercial motor carrier insurance and registration, see the FMCSA insurance filing requirements and the U.S. Department of Transportation.

This article is general information, not insurance or legal advice. Coverage terms vary by policy, state, and program; read your policy and confirm your program's current requirements. Last Mile Delivery Insurance is a division of Thrive Risk Management.