Taxi Insurance: Public Hire, Private Hire, and the Void Car Policy

There is no version of a private car policy that covers carrying a paying passenger. Not occasionally, not for a friend of a friend, not on an app at weekends. The moment a fare is involved the journey is hire and reward, and hire and reward is a different product.

Public hire against private hire

Public hire: a hackney carriage, can be hailed in the street and can wait on a rank. Private hire must be pre-booked through a licensed operator and cannot legally accept a street hail.

Insurers rate them differently because the exposure differs. Public hire spends more time in dense traffic picking up unplanned journeys, which increases both accident frequency and the variety of the risk.

Buying the wrong one is not a pricing error. A private hire policy on a vehicle working a rank is the wrong cover for what the vehicle is doing, with the same consequences as no cover.

Two authorities with two sets of requirements

The licensing authority sets what the licence requires, which commonly includes a minimum level of cover and sometimes a specified indemnity limit for passenger liability. The insurer sets what the policy provides. Both have to be satisfied and neither checks the other.

That is why a policy can be perfectly valid and still leave the driver in breach of licence conditions. Read the authority's requirements first and buy to them, rather than buying a policy and hoping it qualifies.

Requirements vary between authorities, sometimes significantly, and a driver licensed by one authority working in another area needs to know which rules apply to them.

Social use on a taxi policy

Most taxi policies include social, domestic and pleasure use so the vehicle is covered when not working, but it is worth confirming rather than assuming, particularly on cheaper policies.

Where the vehicle is also the family car, check whether other household members are covered for social use. That is commonly an extension rather than a default.

And check the position when the vehicle is available for work but empty. Plying for hire with no passenger is working, not social use, and the distinction can matter after an incident.

Passenger liability is the limit that matters

Third-party cover on any motor policy is effectively unlimited for injury in the UK, but the practical questions are what the policy does about passengers specifically, and whether the licensing authority has set a figure.

Also consider what happens to the vehicle. A taxi off the road is a business with no income, so loss-of-earnings or replacement-vehicle cover is not a luxury in this trade. It is the difference between an incident and a month without work.

Check whether a replacement is a like-for-like licensed vehicle. A courtesy car that cannot legally carry fares is not a replacement for a taxi.

How the policy is priced and paid

Annual premiums in this class are high relative to private cover, which is why monthly and seasonal arrangements are common. Read the credit terms, because instalment interest in this market is not always small.

Some insurers offer cover by the day or the week for occasional working, which suits a driver doing it part-time. That is a legitimate product and it is a far better answer than a private policy and optimism.

No-claims history from private driving does not always transfer, and where it does the discount structure differs. Ask specifically rather than assuming years carry over.

Before you take a single fare

Establish whether the work is public or private hire, read the licensing authority's insurance requirements, and buy a policy that satisfies both those requirements and the reality of how the vehicle is used, including when it is empty.

Then check replacement-vehicle cover, because that is the clause that protects the income rather than the car. See the clauses common to every policy, the goods version of the same line and liability for the work itself.

App-based work does not change the insurance question

The most common misunderstanding in this trade now comes from platform work. Driving through an app feels like a different category from running a taxi: the booking is handled for you, the passenger is a stranger the platform found, and it can be done for a few hours a week around other employment. None of that changes what the journey is.

A passenger paying for a ride is a fare, and the vehicle needs hire and reward cover plus whatever licence the local authority requires. Platforms generally require both before allowing a driver onto the system, which is worth treating as the minimum rather than the standard: the platform is checking its own exposure, not making sure your cover fits how you actually work.

The specific thing to check is whether the platform provides any cover of its own and, if it does, what it covers and when. Some arrangements only apply while a job is active, leaving the period between jobs — logged in, driving, looking for the next booking — on your own policy. That gap is where an incident is most likely, since it is where most of the driving happens.

If you work through more than one platform, do not assume the arrangements match. Buy a policy that covers the work regardless of which app produced it, and treat any platform cover as an addition rather than a substitute.

Frequently asked questions