Do taxi drivers need public liability insurance in the UK?
Yes, it’s advised UK taxi drivers have public liability insurance to protect themselves against third-party claims should they injure someone or damage property while behind the wheel.
While public liability cover isn’t required by law, it is highly advised that drivers include it in their hire and reward policies for financial protection and peace of mind.
Taxi insurance with at least third-party-only (TPO) cover is a legal requirement for hire and reward purposes in the United Kingdom. This applies to taxis in the private hire or public hire sector, whether you are a casual, part-time, or full-time driver.
So why is public liability insurance important, what does it cover, and how much does it cost in the UK? Fortunately, we’ll answer all these questions in our guide.
Why is taxi public liability insurance important?
Public liability insurance is important for several reasons and is an essential part of any taxi driver’s insurance policy. It provides financial protection against claims arising from accidents or personal injury involving passengers or third parties.
Here’s the breakdown:
- Third-party claim protection: If passengers or members of the public suffer injury or property damage due to a taxi driver’s negligence, the driver could be held liable.
- Financial protection: Public liability insurance covers the cost of legal and compensation claims, saving you from dipping into your own pocket to cover these expenses.
- Peace of mind: Knowing you are financially protected in the event of a collision provides significant peace of mind, allowing you to focus on your driving.
- Compliance: While not a mandatory requirement, some councils may require you to have public liability insurance to obtain or renew your public or private hire taxi operator licence. Furthermore, this insurance may be needed as part of a contractual agreement, such as when transporting school children or nursing home residents.
What are the consequences of not having this insurance?
Not having public liability cover can lead to serious consequences for taxi drivers and their businesses. Let’s take a closer look:
- Personal liability: Without public liability, a taxi driver may be held personally liable for any injuries or damages caused during business operations.
- Breach of contract: If your contract requires public liability and you don’t have it, you’re in breach of it. This can result in service termination and potential claims for damages or injury.
- Loss of reputation: Operating without the advised insurance can damage your business’s credibility, affecting future business opportunities.
- Financial risks: In the event of an accident, taxi drivers must cover all legal and compensation claims out of pocket, which can be a disastrous financial blow.
Bonus read: How To Protect Your Taxi Firm In The UK
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Get QuotesWhat does public liability insurance cover?
As mentioned, public liability insurance for taxi drivers protects you against claims made by the public for injuries or damages caused by your business activities. These third-party claims can come from passengers, pedestrians, or other motorists.
Public liability is generally included in most standard taxi insurance policies; however, the amount of cover depends on which level you opt for:
- Third-party only (TPO) – covers medical bills and legal and compensation claims from third parties only.
- Third-party, fire and theft (TPFT) – covers TPO claims with the addition of covering costs should your taxi be damaged by fire or stolen.
- Fully comprehensive – includes TPO and TPFT and will cover the taxi driver’s medical bills and vehicle repair costs.
A few examples where public liability cover can be handy include:
- A passenger might decide to sue you should they have an allergic reaction in your cab. This could be caused by anything from cleaning detergents to air fresheners.
- A passenger injures themselves when getting into/out of your taxi vehicle. These injuries could range from minor bumps and bruises to more serious injuries such as a broken limb or concussion.
- You swerve for something in the road and knock over a pedestrian.
- You are involved in a collision with another vehicle, and passengers are injured.
- You crash into someone’s boundary wall, causing property damage.
What isn’t covered by public liability insurance?
Standard TPO cover does not cover:
- Taxi driver costs, such as medical bills or vehicle repair bills. You’ll need to opt for a fully comprehensive policy should you want this additional cover.
- Injuries or damages related to criminal activities.
- Injuries or damages related to illegal drugs or alcohol.
- Should you hire taxi drivers within your business, employee injuries are not covered by public liability insurance. You will need specialised employers’ liability insurance in these instances.
How much does public liability insurance cost in the UK?
Public liability insurance for taxi work starts from roughly £54 annually. However, prices may differ as no two taxi businesses are the same.
What factors influence taxi public liability insurance costs?
- Occupational risk: Taxi driving is considered “high risk” as you are responsible for your passenger’s safety while behind the wheel.
- Type of taxi service: Liability costs for public hire taxi insurance may be higher than for private hire insurance because public hire drivers face greater risks when picking up passengers directly from the street.
- Location: Taxi drivers in cities generally pay higher premiums than those in rural areas.
- Operational hours: Late nights, early mornings, and peak hour driving tend to push up insurance costs due to higher chances of being involved in an accident.
- Drivers’ age and experience: Younger, inexperienced drivers generally pay higher premiums.
- Claims history: Frequent past claims may hike up liability insurance costs.
Final thoughts
While public liability is not a legal requirement, it is highly advised that UK taxi drivers have it to ensure financial protection and peace of mind. Accidents can happen instantly, and having the correct insurance cover is vital for ensuring both your and your passenger’s safety while on the road.
Without it, you risk footing the bill for all legal or compensation claims, which can lead to bankruptcy, especially if you’re a small taxi business.
Find the best public liability deal that aligns with your taxi operations and budget with SimplyQuote’s 100% free online comparison tool today.
Frequently Asked Questions
Public liability insurance policies offer various cover amounts, ranging from £1 million to £10 million, depending on your insurance provider.
UK taxi drivers need a hire and reward policy within their taxi insurance policies to legally transport passengers from A to B. Additionally:
- A private hire driver who collects passengers through ride-hailing apps like Uber needs private hire taxi insurance.
- Public hire drivers operating black cabs or hackney carriages need public hire taxi insurance.
Taxi insurance is more expensive than domestic policies because it is a type of business insurance. Taxi driving is considered “high risk” due to the increased likelihood of being involved in an accident, as drivers generally operate during peak hours and cover more miles than the average Joe.
No, it is not illegal to operate a taxi business without public liability. However, it is highly recommended that a taxi driver include this in their insurance policy for financial protection and peace of mind.