Hire and Reward Insurance

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By Crispin Bateman
Updated on Monday 17 August 2020

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Vehicle insurance isn’t always straightforward, especially if you’re using your car for anything other than personal use.

If you use your vehicle as a taxi or courier business, then you will need a specific type of cover known as hire and reward insurance.

Our guide explains what hire and reward insurance is, when you might need it, and how to take out cover.

What is hire and reward insurance?

Hire and reward insurance is a type of vehicle insurance policy that is legally required if you are a courier, haulier, taxi driver, furniture remover, or anyone else who is paid to deliver goods or carry passengers on UK roads.

Any business use of your vehicle must be properly covered and that means one of three classes of business use car insurance.

Hire and reward insurance forms part of the top end – class 3 business use insurance – which covers you for using your vehicle as a primary part of your business.In this case, it’s courier insurance – cover for the delivery of other people’s goods, including food delivery – and taxi insurance.

Do I need hire and reward insurance?

If you use your vehicle as a taxi or to deliver or transfer goods, or anything of a similar nature, then you should check whether or not you need hire and reward insurance.

Class 3 business use is required for anyone who uses their vehicle in any of the following ways:

The carriage of goods for hire and reward is slightly different to transporting items that you own as part of your job; while this still needs business-class insurance, it is considered carriage of own goods rather than hire and reward.

An example of ‘carriage of own goods’ would be a tradesman using a van to take tools to a customer’s site.

You might like: A Guide to Food Delivery Cover

What is hire and reward insurance for a van?

Class 3 business insurance is available for all types of vehicles – a van or motorcycle can be covered in the same way as a car.

You could even get class 3 business insurance to become a taxi driver using a camper van, as unusual as that would be!

If your van is used to transport or deliver other people’s goods in exchange for cash, you should have hire and reward insurance as part of your cover.

For more information on van insurance, be sure to check out our related guides:

What is class 3 business use car insurance? Is it the same as public liability insurance?

Running a business requires multiple types of insurance policies, with motor insurance being just one part of the total package that protects your company.

Class 3 business use car insurance (hire and reward cover) is there to make sure that you are legally entitled to be driving on the road as part of your work.

It is an enhanced version of your standard social, domestic and pleasure car insurance that takes into account the greater risk that you present on the road as you use the vehicle for business purposes.

Other types of insurance associated with the business will also be needed, but will not necessarily be related in any way to your driving.

Public liability insurance covers you and your business should a member of the public suffer personal injury or damage to their property when your company is at fault, while employer’s liability insurance needs to be in place to protect anyone who works for you while they are doing their job.

It’s important to remember that both of these additional types of insurance are very important to anyone running a company, and you will need to look into them if you wish to be fully protected.

How much is hire and reward insurance?

Hire and reward insurance is typically more expensive than basic vehicle insurance, but it of course varies between each policyholder.

To find out exactly how much you’d pay for cover, tap the button below and get your free quote today!

Why is hire and reward insurance so expensive?

Hire and reward insurance is more expensive than personal car insurance as a reflection of the additional risk that you pose as you are using the vehicle for business purposes.

As a business driver, you will likely be doing all or some of the following, which makes you more high-risk to insure according to the insurance providers:

  • Driving many more miles

  • Driving during busy periods

  • Driving in inner-city areas with more hazards

  • Driving at hazardous times (night time delivery, for example)

  • Driving while relying heavily on sat-nav systems

  • Driving under time pressures

  • Driving with heavy loads

  • Driving with more passengers

  • Driving with more distractions

What does hire and reward insurance cover?

Hire and reward insurance covers you in the case of an accident. It will pay for any damages and repair costs that arise as a result of a road traffic accident, cover legal expenses and any personal injury compensation claims.

Depending on your level of cover, it will also cover the goods in transit so that a crash that damages or destroys them doesn’t cost you further.

Note, however, that you are unlikely to be covered in the case of theft or vandalism of goods that occur while the vehicle is parked – you should look to specialist vehicle contents insurance to leave your van or car overnight while holding goods.

Read more: Car Insurance Extras: Which Ones are Worth it?

Do I need courier insurance personally or does my company provide it?

Depending on your contract with your company, you may be covered by their insurance – in which case, you will not need to get a goods in transit standalone insurance policy yourself.

There are a number of different jobs that require specialist hire and reward insurance, from newspaper delivery drivers, to waste transportation professionals.

You should always check with your employer, but you are more likely to be covered by their business insurance if:

  • You are on the payroll of the company (rather than a contracted worker)

  • The vehicle is provided to you as part of the job

  • You pay benefit-in-kind tax (i.e. the car or van is paid for by the company in some way)

  • Your employer has never asked to see your own car insurance!

On the contrary, if you are any of the following then you should check immediately to see if you need independent insurance:

  • You are self-employed

  • You own your own business

  • You own or pay for the vehicle yourself

  • You have no signed contract

  • Transporting the goods (or people) is infrequent and could have been misunderstood to not require specialist insurance

The simplest thing can put you outside your personal car insurance, which is why it’s so important to always check that you have the right cover for the job you are doing and if you are in any doubt, contact your insurer and describe your situation to them – they’ll know what cover you need and can upgrade you immediately.

Do I need special insurance to be a delivery driver?

Hire and reward insurance is an umbrella term that covers many different types of specialist insurance policies.

You may even find that you can get specific insurance for your exact work that is cheaper than a generalised class 3 business insurance, so be sure to shop around and do your research.

Do you need insurance to deliver takeaways?

It is easy to see how this casual-seeming job which is often a second income for people in the evenings feels like it shouldn’t need anything specialised, but a curry or pizza to a customer counts as hire and reward, so specialised food delivery insurance is available and can often be an affordable option to delivery drivers.

Read our full guide to food delivery insurance for more information.

How to get hire and reward insurance

You can get a quote for courier insurance from Quote Zone today by tapping the button below:

You simply complete one straightforward form and then receive your quote within minutes, free of charge, of course.

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Related articles:

A Guide to Food Delivery Insurance

Types of Car Insurance in the UK

Recover Your Excess: What is Excess Insurance?

How Can Car Insurance Become Void or Invalid?

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