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What is Hire and Reward insurance?

By Eamonn Turley
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Eamonn Turley has a wealth of experience within different insurance sectors. Through hard work and over time, he has gained expertise in digital marketing and user interface design. Elements that are crucial to any successful online business. The key aim is to develop websites that are intuitive, fast to load and provide insurance quotes tailored to your needs.

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July 2023

Hire and reward insurance provides you with insurance required to provide a service using your van in return for a reward. The reward does not have to be money, for example it can be a benefit in kind.

For couriers, having the correct type of hire and reward insurance for your car or van is important so you, your vehicle and your business will have the protection it needs. This classification of insurance is used for those in the courier businesses where they are paid to take a package, food items or a person from one location to its destination.

hire and reward insurance

Multi Quote Time works in partnership with Quote Zone who provide a simple form which once completed is submitted to a specialist panel of brokers. These brokers will be in contact via the telephone to provide you with options and their best quotes.

Hire and reward insurance covers any service that a vehicle is used, resulting in a reward. If you ferry passengers for reward as an Uber driver, you will need Uber insurance, which is a form of private hire insurance. If you are or intend to use your car for such purpose, you will need a hire and reward car insurance policy.

Types of Hire and Reward insurance

Hire and reward insurance will normally fall into one of the following categories:

Is Hire & Reward Insurance a Legal Requirement?

Hire and reward insurance is a legal requirement if you are transporting goods or passengers for a reward, normally a payment. The panel of UK brokers can provide hire and reward insurance quotes for a wide range of vehicles and professions. We have listed a few examples of professions and vehicles below.

  • Haulers
  • Minicabs, Taxi Drivers and Chauffeurs
  • Couriers
  • Furniture Movers 
  • Towing services

Who Needs Hire and Reward insurance?

This type of cover is required for those who deliver packages, food items, private hire drivers, public taxi drivers, long haulers, ride-share, furniture removal drivers are just some examples of the business categories that this type of cover is required to operate legally

Why is Hire and Reward Van Insurance Expensive?

Hire and reward van insurance tends to be more expensive than standard car or van insurance.  The key reason is that the use poses additional risk to the insurance company.  Accidents are more likely given the nature of the job, constantly on the road working to a tight delivery schedule. Consider the following:

  • Some drivers are running against the clock and must make delivers regardless of prevailing weather conditions.
  • Food delivery drivers are constantly checking their app for directions, and often the direction take them down roads that are new to them.
  • Hire and reward drivers are on the road all day, making multiple stops.

All these factors lead to a higher risk profile in terms of insurance, which is reflected in a higher premium. Some brokers will not even offer cover to young and inexperienced drivers. In summary, deliver drivers need a specialist cover that recognises and takes into account that they are in a higher risk category than normal social or business drivers.

What is the Difference between Haulage and Courier Insurance?

If you are using your van to delivery goods, you will need van courier insurance. Haulage insurance is the traditional type of insurance that you would associate with larger trucks that move a shipment of goods from A to B. The destination is not always clear-cut, but the broker can advise based on the information that you provide.

  • Courier : Tailored to a delivery service with multiple drops during the working day. 
  • Haulage :  Aimed at larger HGV that make one or two deliveries over a larger distance. Live stock hauliers being a good example.

What Level of Cover is Available for Couriers?

For most couriers, this is a class 3 business policy. The levels of protection include the following;

  • Third Party Only is protection for the other person's vehicles and their medical bills when you are at fault in an accident. This is the minimum level required by law. You, your vehicle, nor the goods you are transporting have any protection.
  • Third Party Fire and Theft is the same as third party, along with your vehicle being covered if it is damaged by a fire or is stolen.
  • Comprehensive covers both you and the third party involved in an accident. Both vehicles will be repaired and medical bills for both parties will be paid.
Types of Vehicle Insurance ComprehensiveThird Party OnlyThird Party plus Fire & Theft
Cover if your vehicle is damaged in an accidentNoNo
Cover for your vehicle if damaged in a fire or stolenNo
Compensation for passengers and others
Cover for damage to the property of a third party

Additional Coverage Options:

The above cover only addresses the road risk insurance element, but not the contents you are transporting. To cover the items or the people you are transporting, a carriage of goods for hire and reward policy is needed. The level of cover required is dependent on what is being transported and its value. For couriers transporting high end and valuable items, the cost of this insurance is higher than food delivery drivers because the replacement cost will be higher. 

Public liability is another add-on that is advisable, especially for the private hire courier. This is protection if a third party makes a claim of being injured or their property damaged due to your services. This coverage handles the court fees, legal fees and any settlement in the case.

Does a Vehicle Rental Business Need Hire and Reward insurance?

The growth in the staycation industry has created a new demand for self hire vehicles in campervan sector and car rental sectors. For those that are staring out as a new venture, hiring out any type of vehicle you will need a specific type of cover referred to as self drive hire insurance or pay as you go self drive hire insurance 

Take steps to lower the cost of Hire & Reward Insurance

Reducing the policy premium is possible if you can reduce the risk that you pose to the broker. We have listed some areas that action can be taken to get a cheaper hire and reward insurance quote.

  • 1. Van Size : Keep the size of your vehicle to a minimum and if possible use one with a small displacement engine, which helps to reduce the risk the vehicles pose.  Larger vans with larger engine pose a higher risk to the insurance company, raising the cost of the premium.
  • 2. Van Security : Are you able to provide secure parking when not in use? If you can provide off street parking, preferable in a locked and secure building or garage, this will reduce risk and lower final cost.
  • 3. Paying your premium on an annual basis will also add additional savings.
  • 4. Excess The excess is the amount that you would be liable for in a claim against you. All polices come with an excess similar to when you rent a van you will have local excess. By speaking with your broker, it is possible to increase your excess liability in return for a lower premium. Read this in depth guide on van rental excess insurance within the UK and how you can take extra cover to waive it.
  • 5. Clean Licence : With speed cameras everywhere you need to a good law-abiding driver to avoid points on your licence, if you drive within speed limits and avoid driving conviction you will be rewarded with a cheaper insurance than car insurance with points on your licence. 
  • 6.PAYG : If you only work a  few hours per week as a courier a pay as you go hire and reward policy should work out cheaper than an annual policy.  

How much does hire and reward insurance cost?

The cost of hire and reward insurance in the UK will be based on a number of factors that will vary for each individual or business, as such it is difficult to give an exact figure, but expect to pay more than you would for business use car or van insurance to cover additional risk.

The key factors that go towards calculating the insurance costs include the type of vehicle and insurance bracket.   What goods are being couriered in terms of increased risk to the insurance company. The driver’s experience and claims history will also play an important factor in arriving a t a final premium costs. The type of cover will also impact the costs, traditional full comprehensive cover is the most expensive, but third party cover prices have been increasing as insurance companies are finding the number of claims was proportionally higher with this lower level of cover

Hire For Reward Insurance FAQ's

Do food delivery drivers need a hire and reward insurance Cover ?

Most food delivery drivers will need to take out hire and reward insurance. In some cases, the restaurant or café may provide you with a delivery vehicle that is covered for food delivery. In most cases you will be using your own mode of transport car, van or bike and your standard vehicle insurance policy will not provide cover for food delivery. You can opt for an annual policy or a monthly hire and reward policy. If you only work occasionally, or it is a part-time gig, look at a pay as you go food policy. 

If you only work occasionally, or it is a part-time gig, consider a pay as you go food insurance policy. 

What van types are covered with a hire and reward policy?

Quotes are available for all van categories, we have listed these below. If your van has been modified, this may impact the quote, and you must notify the broker during the quote process. Failure to notify the broker of any modifications can invalidate your cover. A good example of a typical van modification is the addition of a lifting ramp.

  • Pickup Truck - Rear can be open or closed, for personal or business pickup up insurance.
  • Micro Van : These are popular with delivery drivers, the rear can be raised.
  • Panel Sides Medium: These are based on standard cars, but with the rear enclosed and with a raised roof
  • Box / Large: This is the traditional workman van with a rear without windows and is popular with tradesmen or a large delivery business 

Do Uber drivers need Hire & Reward insurance?

Uber drivers also come under the title of private hire drivers. Drivers for private hire are different to taxi drivers as they can not be hailed and must be ordered in advance. Uber drivers need a hire and reward policy specific to their needs. Have a look at our detailed guide on private hire insurance for more details. 

How much is hire and reward van insurance?

How much is hire and reward van insurance will depend on a range of factors. Some of the more important factors would be your driving history, value of van, value of cargo that you will be couriering. The van insurance is available at three levels, but you need that additional courier cover if you are using your van for hire and reward.

Is hire and reward insurance for young drivers available?

The demand for hire reward insurance exists over all age groups, from young drivers under 25 and in some cases under 21, plus drivers that are over 50 and above. Comparative insurance quotes are available for all age ranges for cars, vans and motorbikes. Some brokers will set minimum requirements, but it is always possible to get young driver hire and reward van or car insurance.

If I just carry tools and goods for my trade, do I need to take out hire and reward van insurance?

This situation applies to many, for example, builders, electricians or carpet fitters, and you will require business vehicle insurance plus cover your trade tools and equipment.

Get hire and reward insurance tailored to your business requirements

A courier driver insurance policy or any hire for reward policy should be tailored to your specific needs. By completing one simple form provided by Quote Zone you will receive multiple quotes from a panel of UK specialist insurance providers. These quotes can be tailored to fit your exact requirements within your service sector.

Delivery Driver Market Statistics
Top Companies HiringStart Your New Career, Just Eat and Yodel / Home Delivery Network
Average Delivery Driver Salary£25,266
Current vacancies26,964

Data  from  Adzuna

Helpful Links

BIB: The British Insurance Brokers' Association is the UK's leading general insurance intermediary organisation

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