What you need to know about taxi insurance
Whether you are a sole trader with a single vehicle, or a firm managing a fleet, you need insurance. But there’s often confusion about what insurance is required. In the UK, you must be insured on the road and, if you have employees, you must have employer liability cover. There’s also public liability, theft and damage, income protection and lease protection cover to consider. The cost of insurance is proportionate to risk. As a taxi driver, it is anticipated that you have a higher risk than an individual purchasing standard motor insurance because of your higher annual mileage and interaction with the public. Since insurance can be confusing, and there is a very real risk that your actions may invalidate your policy, we’ve highlighted some key considerations.
Public Hire and Private Hire Taxi Insurance
The insurance requirements for public hire are different to private hire. Public hire taxis do not need to be pre-booked and customers can hail from the street. This implies higher risk, which is why public hire insurance is often more expensive than private hire insurance, although this is not necessarily the case. Vehicle age, driver experience and location are all considerations in policy pricing.
In contrast, private hire insurance is required if you are not licensed to be flagged down by the public. This may imply lower risk since journeys and customers can be pre-vetted. Private hire policies therefore tend to be cheaper than public hire. However, since private hire tends to be a popular option amongst younger drivers who are too young to apply for a public hire license, it should be noted that policy cost will vary with age and experience.
Whichever criteria you fit into, make sure you are open and honest when applying for insurance since it will be invalidated if you purchase the wrong type.
Named Drives Versus All Driver Policies
Single named driver insurance is the ideal option if it’s just you and your car. However, this generally limits a single driver to a single car. If you own a fleet or have multiple drivers, taking out ‘policy only’ cover will let you add more names as you take on more drivers. However, if you keep growing, you’ll most likely get to a point where an ‘every driver’ policy is more appropriate, allowing all your drivers to drive all your cars. However, an ‘every driver’ policy may only be applicable to drivers over a certain age, usually 25.
Some policies may be regional and not cover higher-risk cities. Some may also stipulate operating times. Be sure to check that the policy you take out covers your specific usage requirements.
Beware, some policies only insure a car for business use. If your car is also for personal use, you may find your policy invalidated. Make sure you check your policy as this can land you in a lot of trouble if you get it wrong.
When applying for taxi insurance it is recommended to speak to a specialist broker. Whilst the process may be longer and slightly more expensive than self-serving comparison websites, brokers will ask you the relevant questions to make sure you take out the right policy for your circumstances.