Public Hire Taxi Insurance for Licensed Hackney Carriages

What is taxi insurance?

Taxi insurance is specialist motor cover for vehicles licensed to operate as hackney carriages or public hire taxis. This means vehicles that passengers can hail on the street, queue for at designated taxi ranks, or book through a taxi office. It falls within the broader category of hire-and-reward insurance, which covers carrying paying passengers.

Standard car insurance policies do not cover public hire work. Using a vehicle as a taxi without appropriate cover would likely invalidate your insurance and could have legal consequences.

Who needs public hire taxi insurance?

This type of cover is aimed at drivers operating licensed hackney carriages. That includes traditional black cab drivers in cities like London, as well as taxi drivers working under local council hackney carriage licences elsewhere in the UK. If you already hold a taxi licence or are in the process of applying for one, arranging the right insurance is essential.

If you work for a ride-hailing platform or minicab firm where all journeys are pre-booked, you would typically need private hire insurance rather than taxi cover. The distinction matters because insurers and licensing authorities treat public hire and private hire as separate categories with different requirements.

Taxi insurance vs private hire insurance

The key difference lies in how passengers can book your services. Public hire taxi insurance covers vehicles that can accept passengers who flag them down or queue at taxi ranks, with no advance booking required. Private hire covers vehicles that must be pre-booked through an operator or app.

Public hire (taxi/hackney carriage)

• Can be hailed on the street
• Can pick up from designated taxi ranks
• Usually requires a taximeter
• Often subject to council vehicle specifications

Private hire (minicab/PCO)

• All journeys must be pre-booked
• Cannot legally be hailed on the street
• Includes ride-hailing app drivers
• Different licensing framework

This is also different from general commercial car insurance, which covers business use but typically not hire-and-reward work. If you use your vehicle for work travel without carrying paying passengers, business use cover might be sufficient.

What does taxi insurance cover?

Like other motor insurance, taxi policies are available at different levels of cover. The level you choose depends on your needs, your vehicle's value, and what the insurer offers.

Third party only

Meets the minimum legal requirement. Covers damage you cause to other people, vehicles, or property, but not your own vehicle.

Third party, fire and theft

Includes third party cover plus protection if your vehicle is stolen or damaged by fire.

Comprehensive

Extends protection to your own vehicle for accidental damage, which many taxi drivers prefer given that their vehicle is central to their livelihood.

Taxi-specific cover options

Beyond standard cover levels, taxi policies may address specific aspects of public hire work:

• Public liability for passengers
• Cover for taximeters and radio equipment
• Replacement vehicle provisions
• Legal expenses cover
• Breakdown assistance

What is included varies by provider. It is worth reviewing the policy schedule carefully to understand what is and is not covered.

What affects the cost of taxi insurance?

Insurers consider many factors when assessing taxi insurance applications. Understanding these can help you provide accurate information when getting quotes.

Driver factors

Your driving history matters, including any claims you have made and any motoring convictions. Drivers with points on their licence may find fewer options or higher premiums. Experience is relevant too. Drivers who have held their taxi licence for several years may be viewed differently from those who are newly licensed.

Vehicle factors

Taxis come in various forms, from purpose-built hackney carriages to adapted saloons and wheelchair-accessible vehicles. The age, value, and specification of your vehicle can influence pricing. Some drivers use electric or hybrid vehicles to reduce running costs, though repair costs and parts availability can vary.

Location and usage

Where you operate and park your vehicle overnight are considered. Taxi drivers working in city centres with heavy traffic may face different pricing than those in quieter areas. Security arrangements for overnight parking can be relevant.

Annual mileage

High mileage means more time on the road and statistically greater exposure to potential incidents. Insurers usually ask for an estimate of your expected annual mileage, and accuracy matters because underestimating could affect a claim.

How insurers approach taxi insurance pricing

Taxi insurance is priced differently from standard car insurance because of the commercial nature and higher mileage involved. Insurers typically consider:

• Operating hours and patterns: Drivers who work primarily during daytime hours may be viewed differently from those covering night shifts when accident rates can be higher.
• Geographic area risk: City centre operations with heavy traffic present different risks than suburban or rural taxi work.
• Taxi licence duration: Longer-held hackney carriage licences can demonstrate experience in the trade.
• Fleet or individual: Owner-drivers may find different pricing structures than fleet operators.
• Vehicle adaptations: Wheelchair-accessible vehicles or other adaptations may affect pricing due to repair costs.

How to manage taxi insurance costs

Taxi insurance represents a significant business expense. These practical approaches may help manage costs:

Licensing and council requirements

Licensing requirements vary by local authority, and this affects insurance. Most councils in England and Wales have their own hackney carriage licensing regimes with specific rules about vehicle age, condition, accessibility, and driver qualifications. Insurers typically expect you to hold a valid hackney carriage driver licence issued by the council in whose area you operate.

Vehicle specifications

Many councils require taxis to be wheelchair accessible or to meet certain turning circle requirements. In London, all new hackney carriages must be zero-emission capable. These requirements influence what vehicle you can use and, consequently, what insurance options are available.

Taximeters and equipment

Licensed taxis are required to have functioning taximeters, and many drivers also use radios, card payment terminals, and other equipment. Whether these items are covered under your policy and how they are valued can vary. It is worth checking what provisions exist for equipment repair or replacement.

Replacement vehicle provisions

If your vehicle is off the road following an accident or theft, you cannot earn. Some policies include hire car cover or specific provisions for taxi replacement vehicles, though the terms and limits differ. This can be an important consideration when comparing policies.

Payment options for taxi insurance

Annual premiums for taxi insurance can be substantial, and some drivers prefer to pay monthly to spread the cost. Where monthly payment options are available, there may be additional charges or interest compared to paying annually. Checking the total cost of cover over the year can help you compare options accurately. Some taxi drivers needing temporary cover may find options more limited in the public hire market.

Taxi insurance FAQs