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Taxi insurance is a form of Car insurance designed to protect your vehicle to carry passengers in return for payment. Sometimes referred to as Private Hire or Hire & Reward (which can also apply to Couriers), you risk voiding your vehicle insurance by not having an appropriate policy before allowing customers onboard.
Our partners QuoteZone work with some of the UK’s leading Taxi insurers—fill out a quote form to see what a policy might look like for you, and you can be covered and earning fares before you know it.
- What insurances do Taxi owners/drivers buy?
- Does a Taxi need insurance?
- How much does Taxi insurance cost?
- Additional information
What is Taxi Insurance, and What Does Taxi Insurance Cover?
Taxi insurance is a form of insurance designed to protect you financially while carrying your passengers from A to B. There are 3 different types of taxi vehicle cover, discussed here, and a few additional business insurances to be aware of if you’re either self-employed or running your own taxi company, discussed here.
Whether you’re running a taxi business, working for one or driving self-employed, you still need to make sure your vehicle(s) is appropriately covered. The three levels of vehicle insurance you may be used to when insuring your personal vehicle also apply to taxis, and these are as follows:
|Taxi Insurance Types||Third Party Only||Third Party, Fire and Theft||Comprehensive|
|Repair if your taxi is damaged in an accident|
|Repairs if your taxi is damaged in a fire or stolen|
|Compensation if other people are injured in an accident|
|Damage to third party property|
It’s worth mentioning here that any damages incurred by your passengers (such as injury or damage due to error) won’t be covered by your vehicle insurance—you’ll need Public Liability insurance for that, which we cover down below.
Third Party Only (TPO)
Third Party Only is the lowest coverage level, and a minimum legal requirement before your vehicle can be driven on public roads. TPO will cover you for both any damages incurred by other drivers for an accident you’re at fault for, as well as any damage caused to public property (pavements, light posts etc.) you cause.
You won’t be covered for any damages to your own vehicle in an accident you’re responsible for, so if you rely on your taxi for income make sure you’ve got enough saved away or consider a higher level of coverage. And if you think you can save money buying the minimum TPO cover, think again. Comprehensive plans often come up cheaper, as we show below.
Third Party, Fire and Theft (TPFT)
Third Party, Fire and Theft, as the name might suggest, offers all the coverage a TPO policy would provide you, along with additional protection in the event that your vehicle is stolen or damaged in a fire. As with TPO, you won’t be compensated if you’re involved in an accident that you’re at fault with—if this might prove financially challenging, again, most people would recommend opting for a high coverage level.
The highest level of coverage, Comprehensive Taxi insurance protects both you and other road users in the event of an accident. While every insurance is different, a good Comprehensive policy might include compensation for medical treatment, accidental/cosmetic damage and, of course, coverage for damage in an accident to your taxi.
While you might assume that Comprehensive would be the most expensive, this is often not the case. Our guide to Van insurance found Comprehensive almost 50% cheaper than Third Party focused policies, with research by uSwitch telling a similar story.
As with other vehicle insurances, insurers will likely offer you additional protections that aren’t applied by default. Keep this in mind while shopping around—some providers will provide a combination of these as standard, some will charge extra and some may not offer it at all, so be sure to choose an insurer that offers you a complete policy.
|Common Extras for Taxi Insurance|
|Legal Cover||Offers financial protection for any legal expenses incurred|
|Breakdown||Roadside assistance if your vehicle breaks down|
|Courtesy Vehicle||A replacement vehicle if yours is taken off the road due to an accident/breakdown|
|Windscreen Cover||Occasionally covered by standard, repairs for your windscreen if it is chipped/cracked|
|Personal Accident/Income Protection||Offers compensation if you are severely hurt/unwell and are unable to work for the foreseeable future|
Non-business vehicle use
Your Taxi insurance should also cover your vehicle for personal use (unless you opt for a pay-as-you-go provider like Zego, so you should be safe (although it is worth double checking just in-case).
If you are going to use a pay-as-you-go/short-term Taxi insurance provider like Zego, make sure to check with your SD&P provider if they will allow this—you may risk voiding your coverage if they don’t.
Public Hire vs Private Hire
While the differences between Public Hire and Private Hire Taxi insurance aren’t too complicated, it’s important to make sure you understand them and pick the right one.
If your vehicle must be pre-booked, and can’t be “hailed” in the street (such as while driving for a company like Uber) then you’ll need Private Hire Taxi insurance.
If your vehicle can be either pre-booked or stopped on the street, you’ll need Public Hire Taxi insurance. Most of these taxis are owned by a business, and might display an illuminating Taxi sign on top of their roof.
Whether you run your own taxi business or are self-employed, you’ll want to consider (and in some cases are legally required to hold) certain types of business insurance. If you’re a driver employed full-time by a business, you shouldn’t need to worry about purchasing these, but use this list to check with your employer so you know what you are or aren’t covered for.
Public Liability Insurance
Public Liability insurance for taxi drivers/owners will protect you in the event that a third party (pedestrian, customer, other business) incurs damages (injury, financial loss) as a result of your operation. Typically covering legal expenses and compensation awarded against you, it usually comes in levels of £1M, £2M, £5M or £10M (but can go higher if required).
Some providers include this in your Taxi insurance automatically, some do not. Also be aware that some may also label a form of it as “Passenger Liability”—if this is the case, make sure you know what you are and aren’t protected for, and if you have any doubts, clarify with your insurer. Passenger Liability might cover your passengers inside your vehicle, but leave you uncovered outside of it, perhaps while helping them load their bags.
- A customer's hand gets trapped in an automatically closing door and they believe you’re at fault
Employers Liability Insurance
Employers' Liability Insurance is a legal requirement if you employ any staff, whether full-time, part-time or even on a one-off. It’ll protect you in the event they believe you/your business is at fault for an injury/illness they got while working for you.
Like Public Liability, it’ll cover legal expenses and any compensation awarded. The cost of not having a policy can be severe, and significantly more than the cost of simply having an Employers’ Liability coverage in many cases—up to £2,500 per day that you don’t have an appropriate policy in place. You can read more about Employers' Liability in the Government's guide.
- While coming into your office to hand in his keys for the night, one of your driver's trips and falls, hurting his wrist
Fleet Insurance for taxis can help you to cover multiple vehicles in your business under one policy. There are a number of significant potential benefits, such as discounts for additional vehicles and easier admin when needing to make a claim, so if you do have multiple vehicles working for you it’s worth considering.
Private Hire Taxi insurance covers you if your taxi is only available to hire/pre-book. Public Hire Taxi insurance covers you both if your taxi is bookable or if it can be hailed down on the street.
Public Hire Taxi coverage is typically more expensive, due to the additional risks of picking and dropping off passengers on pavements/busy roads, but if you do accept passengers hailing you down it’s important to make sure you’ve got the right coverage—failure to do so risks your insurer voiding your coverage entirely.
Hire & Reward coverage can refer to a number of different insurances, but boils down to using your vehicle in return for payment. This might include taxi drivers, couriers or food delivery drivers.
Essentially, your Taxi insurance is itself a form of Hire & Reward insurance. Your policy may also (but similarly might need to be upgraded/modified) include Hire and Reward insurance for food delivery or a form of Hire and Reward Courier insurance, so if you’re going to be using your vehicle for other tasks then be sure to check what you are/aren’t covered for.
Some providers do offer short-term/one month/flexible Taxi insurance packages (such as Zego), however it’s important to check with your primary vehicle insurance provider to make sure you’re covered for both Taxi driving and your own personal use. You may be at risk of voiding your SD&P coverage by using a 'part-time' insurance for commercial purposes.
On the other hand, opting for a long-term/annual Taxi insurance will typically cover you for Social, Domestic & Pleasure driving, so you’ll be covered whether you’re working or not.
This varies from provider to provider, so the best advice is to check with your insurer before delivering. Generally speaking, our research indicated it’s likely you’ll be asked to, at the very least, modify your policy before taking food deliveries.
While this can often come with an additional charge, shop around and you might find good deals—providers like Milestone House and Tradex Insurance offer additional fast food delivery insurance at no additional cost to existing taxi policy holders.
It’s been discussed in public forums for drivers many times the somewhat blurred lines when the term “Hire & Reward” is used—sometimes this refers to courier services, but some also place taxi services under the “Hire & Reward” title. Your best bet is just to check with your provider exactly what you are and aren’t covered for.
Your basic vehicle/taxi insurance does not cover any damages your passengers may incur while in your taxi. However, many providers offer a form of Public Liability as standard (or strongly recommend you hold a policy before driving), so it is possible (and not particularly difficult) to hold a more robust Taxi insurance coverage that would protect your passengers—highly recommendable, for both yours and their peace of mind.
You may find “Passenger Liability” offered through insurers/brokers also—this is a slightly less well-rounded form of Public Liability, covering your passengers only in the event that an incident occurs while a passenger is inside your vehicle—so if damages occurred while you were loading their baggage, say, your insurer could be within their rights to refuse to cover you.
Our guide to Uber Driver insurance goes into a lot more detail, but the short answer is absolutely, yes. Uber won’t allow you to sign-up to drive with them without proof of a valid policy.
Public Liability isn’t a legal requirement currently for taxi drivers in the UK—however holding a policy is strongly advisable if you’re self-employed or running your own business. Public liability costs start from around £58 per year, which is not much when you consider that the average settlement last year was £13,500 last year, so consider the risk of not being covered.
Does a Taxi Need Insurance?
Absolutely—it is illegal for a Taxi to drive on public roads in the UK without a valid insurance policy. At a bare minimum, whether you’re driving self-employed, for somebody else’s business or as part of your own, you’ll need a valid Taxi insurance policy before being allowed to bring passengers onboard.
If you are running your own business or are self-employed, consider a form of Public Liability. It’ll protect you, your passengers and the general public in the event of an accident—given the dangers taxi drivers can face (unfamiliar roads, unsociable working hours) it’s generally considered a must-have by most in the industry.
Employers’ Liability is a legal requirement if you hire any staff, so keep this in mind if you anticipate bringing others on board, even if only on a one-off. And finally, if your business is expanding and you have a few vehicles driving for you, consider a Fleet policy to help keep everything simple (and receive a discount for multiple vehicles!) if something does go wrong.
How Much Does Taxi Insurance Cost?
The average cost of Comprehensive Taxi insurance is around £1,400 per year (for our sample taxi driver). Over the quotes we gathered, Comprehensive was consistently the cheapest plan, and is almost £300 cheaper on average than a typical TPO policy.
The majority of policies available online are either TPO or Comprehensive—suggesting they’re likely the most popular with taxi drivers. You may be able to find TPFT through more specialist providers, but it seems most choose between TPO or Comprehensive.
You might find Comprehensive the cheaper Taxi insurance option for a number of reasons—primarily, it’s likely more risk averse drivers might prefer higher coverage, thus reducing the average risk profile of a Comprehensive buyer vs a TPO buyer.
|Average Cost of Taxi Insurance||Cost|
|Third Party Only||£1,643|
Additional Cost Information
Taxi insurance isn’t cheap—the additional risks of being a taxi driver (as opposed to a Social, Domestic & Pleasure driver) are a big driver in the increased costs. These include things such as:
- Unsociable hours
- Risky drop off points (sides of busy roads, pavements)
- Higher mileage
- Theft target (often carrying loose cash)
- City centre driving
The additional mileage will inevitably increase the amount of wear and tear your vehicle deals with, and so insurers will have to update your insurance cost accordingly. The average car mileage in the UK in 2019 was around 7,400 miles. The results for taxi drivers are significantly higher.
Average Taxi Mileage in the UK
According to data from insuretaxi’s 2019 driver survey, 22.9% of taxis drive more than 35,000 miles a year. This is nearly 5X the mileage driven by the typical car. And nearly half of taxis clock north of 25,000 miles annually. Comparatively, only 11.1% of total taxi drivers are under the 10,000 miles a year mark (likely seasonal, part-time or short-term drivers).
|Annual Mileage||Percentage of Drivers|
|5,001 - 10,000||9%|
|10,001 - 15,000||10.6%|
|15,001 - 20,000||17.1%|
|20,001 - 25,000||14.9%|
|25,001 - 30,000||14.4%|
|30,001 - 35,000||9%|
How to Save Money on Taxi Insurance
Many tried-and-true methods of saving money on other vehicle insurances still apply to taxi drivers. These include:
- Clean driving record/no prior convictions
- Long history of no claims
- Having a blackbox/dashcam
- Comparing multiple quotes
- Naming all drivers
- Operating in “safer” areas (away from city centres)
- More years driving experience
You’ll also find your quotes go down the longer you’ve been in the Taxi business. Once insurers know you can provide a quality, safe service for your passengers, they’ll be happy to charge you less in the knowledge that you’re a good pair of hands behind the wheel.
Who Provides Taxi Insurance?
While it isn’t difficult to find a good Taxi insurance provider or broker, many of the companies you might recognise don’t offer policies. Insurers like Direct Line, Tesco or Halifax opt not to offer policies—unsurprising, given the risks of the market compared to traditional car or van insurance.
However, the market does have a number of specialist providers (and even some larger insurers with specialist teams) to make sure you’re covered for all eventualities. Here’s some of the best companies to consider for Taxi insurance:
|Provider||Contact Number||TrustPilot Review Rating||Number of Reviews|
|Acorn||01704 33 99 22||4.3||891|
|Aviva||0800 015 2578||1.5||1,720|
|Collingwood||0345 470 0019||4.6||1,245|
|Connect||01782 200 710||N/A|
|Westminster||0871 789 5594||N/A|
|Zego||020 3053 9815||4.6||1,846|
TrustPilot reviews cover the entire business so may not be indicative of the Taxi insurance product quality.
Sample quotes were gathered for a 35 year old driver with 10 years of taxi driving experience. The driver had no claims made during his time as a taxi driver. He was employed by somebody else's business, lived in North-West London and kept his vehicle on the road outside his house overnight.
The vehicle used was a sample 2015 Toyota Prius.
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