Taxi base insurance: what do you need to know?

A queue of taxis with Taxi Insurance waiting for a fare

Although you must have taxi insurance to operate legally in the UK, there are other types of insurance needed to run a taxi business such as a taxi base.

And, typically, the bigger the operation, the more cover is needed to protect staff, passengers and the entire operation.

The starting point for any taxi business is that the vehicle or vehicles being used have either public hire insurance or private hire insurance and at least the legal minimum third party cover. Comprehensive taxi insurance is the top level of protection which covers damage to the taxi driver’s vehicle as well as any others involved in a crash, regardless of who is at fault.

For a single, independent taxi driver, this is usually all they will need, but other types of insurance are required when operating a taxi base with a number of drivers, especially if members of the public can walk into the office and book a cab.

Taxi bases

For bases with two or more vehicles, fleet insurance is recommended because it allows more flexibility in your business with multiple drivers and vehicles on one policy.

As with any commercial premises, the taxi base and its contents will need suitable cover to protect the business against any damage or losses. The cost of this cover depends on the location of the office or base, the type of building and the value of assets which need to be covered, but it is not usually expensive. This will protect the taxi base against everything from damage caused by fire or flood, to criminal damage, theft and burglary.

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As well as protecting the building, the operators are advised to take out public liability insurance for the premises which offers protection in the event that any visitor – not a member of staff – is injured or their property is damaged by something deemed as negligent on the part of the taxi operation. Typically, if a base has a waiting room for passengers, someone could be hurt in a trip or fall or have their property damaged or lost while they are on the premises. Although this is not a legal requirement, it is recommended in order to avoid high costs from defending or settling claims.

Protecting staff

Taxi bases that employ staff must also have employers’ liability which protects staff if they are injured or become ill as a result of working for the business. It covers damages, compensation and legal fees that a current or ex-employee is entitled to as a result of illness or injury which may have been caused while working for the business. By law, the policy must cover the base for at least £5 million and come from an authorised insurer.

There are two other forms of insurance worth considering for taxi base operators.

The first is business interruption insurance, which would help a taxi base recover lost income in the event of a fire or flood which prevented it from using its base and continue trading.

And the cost of legal fees can be crippling for small businesses, so it is worth considering taking out legal expenses insurance which can help to cover the cost of issues which require legal representation.

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Regulations clearly state which types of insurance are compulsory for taxi drivers and taxi base operators.

Our advice is to take out the best level of cover that protects all aspects of a taxi business.