If you want to drive a taxi in the UK, your local council will usually require proof of hire and reward insurance before issuing or renewing your taxi licence. This type of insurance allows you to legally carry passengers in exchange for payment — something standard car insurance does not cover. You can read more about what hire and reward is and who needs it, here.
The exact insurance requirements can vary slightly between councils, but most licensing authorities require drivers to hold the correct taxi insurance for their vehicle type, whether that’s private hire or hackney carriage (public hire).
Below, we explain what insurance UK councils typically require and why it’s an important part of the taxi licensing process.
What Taxi Insurance Do UK Councils Require?
Most UK councils require taxi drivers to have hire and reward insurance.
This insurance is specifically designed for drivers who transport passengers for payment. Without it, a driver cannot legally operate a licensed taxi or private hire vehicle.
When applying for a taxi licence, councils will usually ask for:
- Proof of valid hire and reward insurance
- Insurance that covers the licensed vehicle
- A policy that remains valid for the duration of the licence period
Drivers may need to show their insurance documents during:
- Initial licence applications
- Vehicle licensing checks
- Licence renewals
If the required insurance is not in place, a council may refuse to issue or renew the taxi licence.
What Is Hire and Reward Insurance?
Hire and reward insurance covers drivers who carry passengers in return for payment.
Unlike standard car insurance, which is designed for personal use, hire and reward insurance protects drivers while they are working as a taxi or private hire driver.
This type of insurance typically covers risks associated with:
- Carrying fare-paying passengers
- Frequent driving in urban environments
- Operating as a licensed taxi or private hire vehicle
Because transporting passengers carries additional risk, councils require this specialist insurance to ensure both drivers and passengers are properly protected. Read our guide to what hire and reward insurance is for more information.
Private Hire vs Public Hire Insurance Requirements
The type of taxi insurance required usually depends on the type of taxi licence issued by the council.
Private Hire Vehicles
Private hire vehicles must be pre-booked through a licensed operator and cannot pick up passengers directly from the street.
Drivers operating under this type of licence normally require private hire taxi insurance, which covers journeys arranged in advance.
You can learn more about how this works in our guide to how private hire taxi insurance works.
Hackney Carriages (Public Hire Taxis)
Hackney carriages — often known as black cabs in many cities — can pick up passengers from taxi ranks or directly from the street.
Because of this, they usually require public hire taxi insurance, which reflects the different ways these vehicles operate.
You can read more about the difference between these licence types in our guide to the difference between private hire vehicles and black cabs.
Why Councils Require Taxi Drivers to Have Insurance
Taxi insurance is a key part of the licensing process because it helps protect:
- Passengers, who rely on licensed taxis for safe transport
- Drivers, who spend many hours on the road
- Other road users, including pedestrians and cyclists
Requiring appropriate insurance ensures that drivers operating licensed vehicles meet recognised safety and financial responsibility standards.
It also helps councils maintain a regulated taxi industry that passengers can trust.
Do Taxi Insurance Requirements Vary Between Councils?
While the need for hire and reward insurance is standard across the UK, individual councils may have slightly different requirements when it comes to licensing.
For example, councils may request:
- Minimum levels of cover for licensed vehicles
- Specific documentation confirming the policy details
- Evidence that the insurance covers the licensed driver and vehicle
- Updated documents when insurance policies change
Because taxi licensing is handled locally, it’s always important to check the guidance provided by your local council’s taxi licensing department.
When Do You Need Proof of Taxi Insurance?
Most councils will ask for proof of taxi insurance at several points during the licensing process.
This may include:
- Applying for a new taxi driver licence
- Licensing a vehicle for taxi use
- Renewing an existing licence
- Updating licence details after a vehicle change
- Providing updated documents if the insurance policy changes
Keeping your insurance documents up to date can help ensure the licensing process runs smoothly.
What Happens If a Taxi Driver Does Not Have the Required Insurance?
If a driver does not hold the correct taxi insurance, the council may not issue or renew their taxi licence.
Operating a taxi without appropriate insurance can also lead to legal consequences, as standard motor insurance does not cover carrying passengers for payment.
For this reason, councils typically require valid insurance documentation before allowing drivers to operate licensed vehicles.
Summary: Taxi Insurance Requirements for UK Council Licensing
In most parts of the UK, councils require taxi drivers to hold the correct insurance before granting or renewing a taxi licence.
In general:
- Taxi drivers must have hire and reward insurance
- The type of cover depends on whether the vehicle is private hire or hackney carriage
- Councils require proof of insurance during the licensing process
- Some requirements may vary between local authorities
- Drivers should always check the guidance for taxi licencing provided by their local council
Having the correct insurance in place is an important step in operating a licensed taxi safely and legally.