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Hire and reward insurance

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What is Hire and reward insurance

For couriers having the correct type of hire and reward insurance 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.

If you ferry passengers for reward, take a Uber driver as an example. In this case you will need uber insurance which is a form of private hire insurance.

What types of professional drivers needs hire and reward insurance?

Hire and reward insurance is commercial business insurance for professional drivers. This is required for those who deliver packages, food items, private and public taxi drivers, long haulers, rideshare, furniture drivers and need car courier insurance. If you are transporting a person or a third party’s property for payment, you need this type of cover as required by UK law.

What type of vehicles can a courier use?

Most couriers use a vehicle under 3.5 tonnes except long haulers. The vehicles under 3.5 tonnes include vans, minibusses, cars, trucks and black cabs.

What type of cover is hire and reward insurance?

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.

Are there any add-ons that should be considered to hire and reward insurance?

The above cover only addresses the road risk, 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 driver because the replacement cost of the times will be more if they are damaged or stolen while being taken to its destination.

Public liability is another add-on that is advisable especially for the private contractor 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.

For the courier service that has employees, employers liability cover is required by UK law. This cover pays the medical bills if an employee becomes sick or injured while working for you.

Why does hire and reward insurance cost more than insurance for social and pleasure type of policies?

By being a professional driver, the level of risk associated with your job is higher than what a driver going to work or on holiday might be. The increase in risks is associated with driving more miles along with being on the road during busy rush hours mostly in the inner cities where more hazards are present. Many couriers are also under a time restraint so they might take more risks while driving to meet the needs of their supervisors. There are also more distractions for couriers to deal with including passengers and looking at the sat-nav systems so the correct destinations can be easily found.

All of those situations have an elevated level of risk associated with them which increases the cost of insuring the vehicle. 

Do I need hire and reward insurance for carrying goods or tools that are part of my trade? For example builders, electricians or carpet fitters. This is different and in this case you need Carriage of Own Goods insurance.

How can I save money on hire and reward insurance premiums?

When taking out hire for reward policy, be very specific about what you will be delivered, the area of cover you are responsible for and the times you will be on the road. All of those factors are used in determining the level of risk you are to the insurance company and is used to determine your premium costs.

  • 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. The bigger the vehicles with a large engine pose a higher risk to the insurance company raising the cost of the premium.
  • The location of the courier vehicle is stored when not in use is a factor in how much the premium will be. The lowest risk is parking it off the street in a locked and secure building with a security system to help ward off thieves.
  • It is also advisable to pay your premium on an annual basis.

A hire for reward insurance policy is not the type of one that fits all. By tailoring the types of business you will be operating to the finest detail is how you can lower the cost of the cover while still having the protection you need. To assist you in receiving multiple quotes there is the quote page courier link available to you.

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