If you’re a taxi driver in the UK, having the right insurance isn’t just a smart choice—it’s a legal requirement. Taxi insurance goes beyond standard car insurance by adding specific protections that taxi drivers need to operate their businesses legally and safely. Here’s a straightforward look at insurance, including what it covers, different types of policies, and why it matters.
Insurance for taxi is a specialised policy that covers vehicles used to transport paying passengers. Unlike standard car insurance, it includes protections for “hire and reward,” which allows you to legally carry passengers who pay for your services. This additional coverage ensures that you’re protected from the unique risks associated with taxi driving, which a regular car insurance policy wouldn’t cover.
In the UK, a valid taxi insurance policy is essential. You’ll need proof of insurance to get your vehicle licensed with the Local Government Authority (LGA). If you’re signing up with a taxi company or operator, they will also require you to show evidence of insurance before you can start working.
Policies come in several forms, each suited to different types of drivers and needs. Here’s a breakdown of the main types of insurance:
- Single Vehicle Policy – This policy covers one vehicle, typically used by self-employed drivers who own and operate their vehicle. With a single vehicle policy, the driver is responsible for taking out the insurance in their own name. Most UK taxi drivers fall into this category and take out a policy for the one vehicle they drive regularly.
- Multi-Vehicle Policy – If you operate two to four vehicles, you may want a multi-vehicle policy. This type of policy allows each vehicle to maintain its own No Claims Bonus (NCB), which is an important consideration for those looking to maximise savings on insurance premiums.
- Fleet Policy – For those who manage three or more vehicles, a fleet policy provides a streamlined way to cover all of them under a single policy. This type of insurance is popular among taxi fleet owners. A fleet policy takes into account the fleet’s collective history, known as “fleet experience,” which includes any claims made across the entire fleet. Fleet policies can simplify the insurance process and potentially lower costs based on claims history.
While these are the primary categories, the term “mini fleet” is also used in the taxi industry. Though not an official insurance term, it generally refers to policies covering two to five vehicles that can either maintain individual NCBs or be grouped under a fleet experience.
Insurance can also include a variety of additional coverages to meet specific needs. Here are a few that might be useful:
Legal Expenses Insurance: This policy covers the cost of legal fees for non-fault claims, usually up to a limit of £100,000. This can be especially helpful for taxi drivers, as it takes away the financial worry of legal costs if someone else is at fault.
Taxi Breakdown Cover: Taxis usually cover more miles annually than standard vehicles, which can lead to more wear and tear. Standard breakdown policies might not cut it for taxi drivers. Taxi breakdown cover is specifically designed to provide adequate assistance if your vehicle breaks down.
Public Liability Insurance: While not included in every insurance policy, public liability insurance can cover incidents that happen outside of driving but are still connected to your work. For example, if a passenger trips over a bag you’ve unloaded, public liability insurance can help protect you against related claims.
Having a good taxi insurance policy is essential for anyone in the taxi industry. It provides the protections you need, allows you to meet legal requirements, and helps ensure your business runs smoothly. By understanding the basics of insurance, you can make informed choices that keep you and your passengers safe while on the road. Remember, a standard car insurance policy won’t cut it in this line of work—insurance is specifically designed to meet the needs of professional drivers.
