Taxi

Taxi insurance for your council licence: what proof do you need?

Councils need proof of hire and reward insurance that matches your licence: public hire for hackney carriages, private hire for pre-booked work only.

Before a council will license a taxi or private hire vehicle, it needs to see proof that the vehicle has motor insurance in force that covers carrying passengers for hire and reward, of the right type for the licence. That means public hire cover for a hackney carriage and private hire (pre-booked) cover for a private hire vehicle, usually shown as a valid certificate of insurance with your application.

The detail varies from council to council, but the legal starting point is broadly the same across England and Wales outside London. Here is what the rules say, what licensing offices typically ask for, and what to check on your policy before you hand it over.

What does the law say about insurance for a taxi licence?

Two pieces of law do most of the work.

First, the Road Traffic Act 1988, section 143 says a person must not use a motor vehicle on a road or other public place unless a policy of insurance that meets the Act's requirements is in force for that use. It also makes it an offence to cause or permit someone else to drive without that cover. Carrying fare-paying passengers is a different use from personal driving, so the policy has to cover it.

Second, for private hire vehicles, section 48 of the Local Government (Miscellaneous Provisions) Act 1976 says a district council may only grant a vehicle licence if it is satisfied that a policy of insurance (or equivalent security) complying with Part VI of the Road Traffic Act 1988 is in force for the use of the vehicle. In plain terms, no suitable insurance, no licence.

Hackney carriages are licensed under older legislation, but councils apply the same principle through their own licensing policies and conditions, as the examples below show.

Public hire or private hire insurance: which does your licence need?

This is where applications most often trip up. The type of hire and reward cover has to match the type of licence.

Council guidance spells this out. South Oxfordshire District Council says applicants must provide evidence of at least third party cover appropriate to the licence type, that insurance for a hackney carriage must state it covers carrying passengers for hire and reward (hackney carriage or public hire), and that insurance which only covers pre-booked journeys is for private hire vehicles only. Barnsley Council asks for a valid certificate of insurance, and for an accident replacement or courtesy vehicle it asks for a certificate for private hire and reward that covers the prospective driver.

If you are unsure what "hire and reward" means in insurance terms, our guide to hire and reward insurance explained covers the difference between paid passenger and paid goods cover.

What insurance documents should you take to the licensing office?

Each council publishes its own checklist, so start there. As a general guide, the process tends to look like this:

1. Check your council's vehicle licensing policy. Look for the exact insurance wording it expects and whether it accepts a cover note or wants a full certificate.
2. Have the right cover in place in time. The policy needs to be in force for the vehicle's use when the licence is granted.
3. Check the certificate itself. The vehicle registration, the policyholder and the permitted drivers should all be correct, and the "limitations as to use" section should mention hire and reward of the right kind (public hire or private hire).
4. Make sure every driver is covered. If someone other than the policyholder will drive the vehicle, the certificate needs to allow it. Barnsley, for example, asks for insurance that will cover the prospective driver when licensing an accident replacement or courtesy vehicle.
5. Bring the other documents on the council's list. Barnsley, for example, also asks for proof of vehicle ownership for a new vehicle and an MOT certificate dated within four weeks.
6. Keep a copy. You may be asked to show the certificate again during the licence.

You can check that a vehicle appears on the Motor Insurance Database with the askMID service, which offers a free check on your own vehicle. Bear in mind this confirms the vehicle is insured, not that the policy covers hire and reward use, so the certificate wording is still what the council will look at.

Can the council ask to see your insurance after the licence is granted?

Yes. Under section 50 of the Local Government (Miscellaneous Provisions) Act 1976, the proprietor of a licensed hackney carriage or private hire vehicle must, at the request of an authorised officer of the council, produce the vehicle licence and the certificate of insurance required under Part VI of the Road Traffic Act 1988. Failing to do so without reasonable excuse is an offence.

The same section also requires the proprietor to report any accident that damages the vehicle in a way that affects its safety, performance, appearance or passengers' comfort to the council as soon as reasonably practicable, and in any case within 72 hours.

Many councils also have licence conditions about what to send in when a policy renews. Those conditions differ, so read the ones attached to your own licence.

How does it work in London with TfL?

In London, Transport for London licenses taxis and private hire vehicles rather than the boroughs. The TfL Private Hire Vehicle Driver's Handbook says every PHV must have hire or reward insurance, and that the policy must be valid when the vehicle is licensed and at all times when it is being used as a PHV.

The handbook also says:

• TfL encourages drivers to carry details of the vehicle's hire or reward policy whenever they are working, plus evidence that they are insured to drive under it (for example, if the vehicle is insured by the operator).
• You can carry the insurance details or display them in the vehicle.
• You must make insurance details available to the police when asked, and give them to a passenger or member of the public if the vehicle is involved in a collision.

Does a private hire operator need insurance too?

The vehicle policy is not the only cover a licensing authority may look at. In the Department for Transport's best practice guidance for licensing authorities in England, the section on operator licensing says it is appropriate for a licensing authority to check that appropriate public liability insurance has been obtained.

The same guidance recommends a standard licence length of three years for taxi and private hire drivers and five years for operators, so the insurance you hold will usually need renewing several times during one licence.

What to check when comparing taxi insurance quotes

When you compare taxi insurance quotes, the price is only part of it. The council will be reading the certificate, so these are the points worth checking on each quote:

• Type of hire: public hire for a hackney carriage, private hire for a pre-booked only vehicle. A pre-booked only policy will not meet a hackney carriage licence.
• Level of cover: some councils, such as South Oxfordshire, set third party as the minimum, but check what yours asks for.
• Named drivers: every licensed driver who will use the vehicle needs to be covered.
• Licensing area: tell the insurer which council licenses the vehicle and where you work.
• Start date: the policy should be in force before the vehicle licence is granted, not after.
• Documents: check when the full certificate will be issued, and whether your council will accept a cover note in the meantime.

If you also use the vehicle for other paid work, such as deliveries, that is a separate use that needs its own cover. Our guide to social, domestic and pleasure vs carriage of own goods explains how insurers describe different types of use.

Kompare is not an insurer and does not give advice. If you are unsure what your council will accept, the licensing team at your local authority (or TfL in London) can confirm the exact wording before you buy.