What is hire and reward insurance?

Professional drivers need specialist insurance to make sure they and their cargo are covered in the event of a crash.

As the cost-of-living crisis continues to bite, many are making the most of their hire and reward insurance to bolster their business by transporting packages as well as passengers.

Flexibility

As well as flagging down black cabs in the streets, or booking private-hire vehicle through an app or taxi base, customers can have a variety of goods delivered to their door, whether it is a fast-food delivery, supermarket essentials, or late-night beer and snacks.

And, while couriers and delivery drivers usually deal with bigger, bulkier loads, it is often taxi drivers who step in to deliver smaller items when customers need them. Even before the pandemic, many private hire drivers were expanding to include fast-food deliveries such as Uber Eats.

Now, as long as they have the correct taxi insurance in place*, it makes sense that they can switch between passengers and deliveries to help their business and give them flexibility. They have a vehicle and are already on the road, so it is a convenient way to boost their earnings.

Higher risk

Drivers who carry passengers or deliver packages spend more time on the road and are considered higher risk by insurers because they cover more miles than average drivers and tend to be in busier areas at peak times, which is why they need specific insurance cover.

Hire and reward insurance is also referred to as private hire insurance, which means bookings must be made in advance, unlike drivers with public hire insurance, who can be hailed in the street or at a taxi rank.

Hire and reward insurance can be taken out for most vehicles, whether it is parcels and packages in a van, delivering fast food in a car or by bike, or a car carrying passengers.

Levels of cover

And, like other forms of taxi insurance, there are two levels of cover. The top is fully comprehensive, which means that in addition to all third parties being covered, the driver and their vehicle are covered even if they are found to be at fault for a crash.

The other level is third-party insurance, which only covers the drivers and passengers of other vehicles in the event of a crash, with the at-fault driver having to foot the bill for their own repairs, injuries and loss of earnings.

One of the benefits of fully comprehensive insurance is that it gives drivers peace of mind that they won’t face huge bills in the event of a crash because it covers the cost of your own vehicle repairs in the event of a fault accident.

Safe driving

Whatever level of cover is chosen, drivers can help reduce their premiums by keeping their licences clean and choosing a suitable vehicle with adequate security and safety features.

Most hire and reward policies also cover the driver for personal, social and domestic use so that they are covered to drive the vehicle when they are not using it for work.

It is also worth considering taking out public liability insurance which covers drivers for any injury or damage associated with their work, such as a pedestrian tripping up and being injured by a parcel they are unloading for delivery.

The flexibility offered by hire and reward policies helps professional drivers such as taxi drivers to get the most out of their taxi business, if they wish to deliver parcels and packages as well as carry passengers.

*check with your insurer if your policy includes deliveries.