Taxi

Minicab fleet insurance: when a small private hire firm needs it

Minicab fleet insurance puts several private hire cars on one policy. See when a 2 to 5 car firm uses it and what a broker will ask for.

Minicab fleet insurance is one motor policy that covers several private hire cars run by the same firm, and no law says a small operator has to buy it. What the law does say is that every car doing private hire work needs insurance that covers carrying paying passengers, so the real question for a 2 to 5 car firm is whether one policy or several separate ones suits the way it runs.

What is taxi fleet insurance?

A fleet policy groups a number of vehicles under one policyholder, usually the business, with one schedule, one renewal date and one set of terms. For a minicab firm, every vehicle on it is covered for hire and reward, meaning it can legally carry passengers who pay for the journey.

That hire and reward part is not optional. Under section 48 of the Local Government (Miscellaneous Provisions) Act 1976, a council outside London must not grant a private hire vehicle licence unless it is satisfied that there is a policy of insurance in force for the use of the vehicle that meets Part VI of the Road Traffic Act 1988. And section 143 of the Road Traffic Act 1988 makes it an offence to use a vehicle on a road without insurance for that use, or to cause or permit someone else to do so. That second point matters to anyone running cars that other people drive.

The penalties are real. GOV.UK says police can give a £300 fixed penalty and 6 penalty points for driving a vehicle you are not insured to drive, a court case can mean an unlimited fine and a driving ban, and police can seize the vehicle.

A fleet policy is simply one way of making sure that cover is in place across every car. It is not a different legal standard. Hackney carriages (taxis that can be hailed in the street) are licensed separately, so check which licence your cars hold before asking for quotes.

When does a small minicab firm need fleet insurance?

There is no vehicle count at which fleet cover becomes compulsory. It tends to come up when one or more of these is true:

• The firm owns or leases the cars, rather than drivers bringing their own.
• Several drivers share the same vehicles across shifts.
• The owner wants one renewal date and one set of paperwork instead of chasing separate policies.
• The firm is adding cars and wants new ones covered under existing terms.

Insurers set their own minimum number of vehicles for a fleet policy, and it varies. Some will write a multi-vehicle policy for two or three cars, others want more. Our article on how many vehicles you need for fleet insurance goes into that in more detail.

If every driver owns their own car and insures it themselves, the firm may not need a motor policy at all. It still has the operator side to think about, which is covered further down.

Minicab fleet insurance or a policy per driver: which suits 2 to 5 cars?

This is the choice most small operators actually face, and neither option is right for everyone. Here is how they compare.

A few points sit behind that table.

Claims are shared on a fleet. Insurers price a fleet largely on its own claims record. One driver with several claims can push up the cost for every car. On separate policies, that driver's history mostly affects only their own premium.

Control cuts both ways. With a fleet the firm knows every car is covered because it pays for the cover. With separate policies, the firm relies on drivers keeping their insurance in place, which means checking certificates regularly and keeping copies.

You can mix the two. A firm can put their own cars on a small fleet policy while owner-drivers keep their own private hire cover. That is allowed, as long as every vehicle doing jobs is properly insured.

Named driver or any driver fleet cover?

Within a fleet policy, there are usually two ways to set out who can drive.

Named driver fleet

Only the drivers listed on the policy are covered. The insurer checks each one before they go on, so adding someone new means telling the insurer first and waiting for them to agree. It suits a firm with a settled team.

Any driver fleet

Anyone who meets the insurer's conditions can drive, without being named. Conditions often include a minimum age, a minimum time holding a full licence, a limit on penalty points and no serious motoring convictions, though each insurer sets its own. It suits firms where drivers change often, but anyone outside the conditions is not covered, and the firm is the one that has to check. Our guide to any driver car insurance explains how those restrictions usually work.

For private hire, the driver must also hold the right licence from the council. Insurance and licensing are separate checks and both have to be in place.

Is there such a thing as cheap taxi fleet insurance?

Nobody can promise cheap cover, and a fleet policy is not automatically cheaper than separate ones. What an insurer charges depends on how risky it thinks the whole group of cars and drivers is. The main things that move the price are:

1. The drivers. Ages, how long they have held a full licence, penalty points and any convictions.
2. The claims record. The fleet's own history, or each driver's history if it is a new fleet.
3. The vehicles. Make, model, value, age and any modifications.
4. Where and when the cars work. Area, whether there are night shifts and where the cars are kept when off duty.
5. The level of cover. Third party only, third party fire and theft, or comprehensive.
6. The excess. For example, if you agree to a £500 excess instead of £250, you pay more of any claim yourself, which can lower the premium.
7. Who can drive. A named driver fleet with experienced drivers is usually seen as lower risk than any driver cover with few restrictions.

People who want to bring the cost down tend to look at the things they can change: tightening who is allowed to drive, taking a higher excess they could actually afford, fitting dashcams or telematics where an insurer offers terms for them, and keeping claims well documented. Whatever you change, the details you give must be accurate. When a business buys insurance, section 3 of the Insurance Act 2015 requires it to make a "fair presentation of the risk", which includes disclosing every material circumstance it knows or ought to know. Leaving out a driver or a claim to get a lower figure can lead to problems when you make a claim.

Minicab fleet insurance: what to have ready before you speak to a broker

Fleet cover for minicabs is specialist, and not every insurer writes it. A broker who works in taxi insurance can approach the insurers that do. Having this ready makes the first conversation much quicker:

1. Business details. Trading name, whether you are a sole trader, partnership or limited company, and your operator licence number and licensing council.
2. Vehicles. Registration, make, model, year, value and private hire licence (plate) details for each car, plus where they are kept.
3. Drivers. Name, date of birth, licence type and date passed, penalty points, convictions and private hire driver licence details for everyone who will drive.
4. Claims history. Any claims in recent years, for the business and for each driver, with dates, costs and who was at fault. If you have had a fleet policy before, ask your current insurer for a claims experience report.
5. How you work. Pre-booked only, airport or school runs, night work, and roughly how many miles the cars do.
6. The cover you want. Level of cover, named or any driver, and the excess you are comfortable with.

If you want to see what is available, you can get taxi insurance quotes through Kompare: you fill in a short form and a specialist broker from our panel contacts you with quotes. Kompare is not an insurer and does not give advice. The broker will explain the options and the terms of any quote.

Does the firm need other insurance as well as the cars?

Motor cover only deals with the vehicles. A private hire operator, under section 80 of the 1976 Act, is the business that makes provision for taking bookings, and that side can bring its own requirements.

The Department for Transport's best practice guidance for licensing authorities says it is appropriate for a council to check that appropriate public liability insurance has been obtained, and its private hire licensing guidance note says the department views correct insurance cover as "an extremely important issue". Councils set their own operator conditions, so some ask for public liability cover or proof of employers' liability if you employ staff, and others do not. Your council's licensing policy will say what it needs.

It is also worth checking what insurance documents your council expects to see for each licensed vehicle, and whether it expects operators to keep copies. Councils set their own requirements, so ask the broker to confirm the fleet policy documents will meet them.