Table of Contents
What is Hire and Reward Insurance?
Why is Hire and Reward Insurance a Legal Requirement?
Types of Use For Hire and Reward Insurance
Make Sure Your Get the Right Cover
Protect Your Work and Stay Legal
The simple answer to this question is, if you use your vehicle to earn money by transporting people or goods, there’s a specific kind of insurance you need: hire and reward insurance.
This guide explains what hire and reward insurance is, who needs it, and why it’s essential to stay legal and protected when using your vehicle for business. Whether you’re a seasoned taxi driver or new to the delivery world, we’ll help you understand how to stay covered and compliant in the UK.
What Is Hire and Reward Insurance?
Hire and reward insurance is a specialist type of motor insurance. It provides cover when you use your vehicle to carry either people or goods in exchange for payment.
If you’re working as a parcel courier, food delivery driver, or taxi operator, standard insurance won’t cover your work-related activities. Without the right cover, you risk serious legal and financial consequences, including invalidated claims, fines, or driving bans.
Why Is Hire and Reward Insurance a Legal Requirement?
In the UK, it is a legal requirement to have hire and reward insurance if you are transporting goods or passengers in exchange for a fee. That’s because driving in these circumstances usually comes with higher risks, like longer hours on the road or tight delivery deadlines.
This form of insurance makes sure that both you and the public are protected. It also ensures that, if an incident does happen, your insurer is aware of and supports your work-related driving.
Who Needs Hire and Reward Insurance?
You’ll need this cover if you’re being paid to use your vehicle to transport people or items, including:
- Taxi drivers (both public hire and private hire)
- App-based ride-hailing drivers (e.g. Uber, Bolt, Ola)
- Food delivery drivers or riders (e.g. Deliveroo, Uber Eats, Just Eat)
- Parcel couriers (including freelance, self-employed, or subcontracted workers)
- Same-day or multi-drop delivery drivers
- Gig economy drivers doing ad-hoc deliveries
Even if you’re only working occasionally, such as weekends or holidays, you’ll still need this specific insurance. Standard vehicle insurance does not provide cover for hire and reward use.
Types of Uses For Hire and Reward Insurance
Having hire and reward cover in place insures you to carry out the following types of work, such as:
1. Hire and Reward for Passengers – Taxi Insurance
If you carry paying passengers, you need a taxi insurance policy. This applies whether you’re driving a black cab, minicab, or working for a ride-hailing app like Uber or Bolt.
- Public hire insurance is for drivers who can accept passengers without a booking (e.g. hackney carriages).
- Private hire insurance is for drivers who only carry pre-booked passengers.
Local authorities often require you to provide proof of this insurance before issuing or renewing your taxi licence.
2. Hire and Reward for Goods – Courier & Delivery Insurance
If you use your vehicle to deliver food, parcels, or other goods, you’ll need delivery insurance. This applies to:
- Food delivery drivers or riders
- Parcel couriers, including those working via Amazon or other platforms
- Part-time or freelance drivers
It is also worth noting that you may require different policies for different vehicles; for example, if using a van, you would require van courier insurance, as opposed to courier car insurance when using a car to deliver goods.
How to Make Sure you get the Right Cover
When arranging hire and reward insurance, it’s not just about ticking a box. To stay protected when you’re working, it’s important to understand a few key points:
1. Be Clear About What You Do
Always be accurate when describing your work to your insurer. Whether you’re delivering food, transporting passengers, or working through multiple platforms, the details matter.
Not disclosing your activities correctly could mean your insurance is invalid, even if the mistake was unintentional.
2. Check Local Requirements
Taxi drivers must apply for a licence through the local council in which they operate. Most authorities require:
- A valid hire and reward insurance certificate
- Proof of a clean MOT and roadworthy vehicle
- An enhanced DBS check
- Medical or driving assessments in some cases
Have a look at our article which answers the question ‘How do I Become a Taxi Driver’ for more information about this.
Delivery drivers may not need licensing, but platforms like Uber Eats or Amazon Flex often ask for proof of insurance before you can work.
3. Keep Your Documentation Up to Date
You’ll need to provide:
- A valid UK driving licence
- Proof of vehicle ownership (V5C logbook)
- Valid MOT and road tax
- Insurance certificate with hire and reward use clearly listed
Having this paperwork ready helps avoid delays and ensures you have everything you need.
Common Mistakes to Avoid
Making the wrong insurance choice, or misunderstanding what’s required, can lead to costly problems. Here are some of the most common errors:
Relying on standard car insurance
Standard insurance, even with business use, does not cover hire and reward activities.
Underestimating part-time use
Even if you only deliver on weekends or during busy seasons, you still need hire and reward cover during those times.
Assuming platform cover is enough
Some gig platforms may offer limited cover, but it’s usually conditional and may not fully protect you or your vehicle.
Not reading the fine print
Understanding what’s included and excluded in your policy helps you avoid gaps in cover. Don’t be afraid to ask questions before committing.
Choosing the Right Policy
When looking for hire and reward insurance, it helps to consider:
- The type of work you’ll be doing
- How often and where you’ll be driving
- Any add-ons you might need (e.g. breakdown cover or goods in transit)
- Whether your insurer has experience with hire and reward drivers
At Acorn Insurance, we have a background in providing hire and reward insurance for UK drivers, with over 40 years of experience in the market.
Protect Your Work and Stay Legal
So, what is hire and reward insurance and who needs it? It’s essential cover for anyone using their vehicle to earn money by transporting people or goods in the UK.
Without it, you risk fines, penalties, and invalidated claims. With it, you can work with confidence, knowing that you’re protected by the right kind of insurance for the work you’ll be carrying out.
Need Help Choosing the Right Cover?
At Acorn Insurance, we’re here to make it simple. Whether you’re just starting out or need specialist support, our team can help you find the right policy to suit your needs We are experienced UK taxi insurance providers and also offer courier car insurance for delivery drivers. Get in touch with us now for more help and information.