What Insurance Do I Need to Drive a Taxi?

Learn about insurance for taxi drivers in the UK, including optional coverage products that could give you extra peace of mind on the road.

What Insurance Is Legally Required for Taxi Drivers?

If you plan to work as a taxi driver in the UK, having the correct taxi driver insurance is a legal requirement. Standard private car insurance does not cover carrying passengers for payment, meaning you could be uninsured if you use the wrong policy.

The exact insurance requirements depend on whether you operate as a public hire driver, private hire driver, or work through a ride-hailing platform. However, most drivers will need:

• Public hire insurance or private hire insurance
• Third-party liability cover (minimum legal requirement)
• Public liability insurance (required by many local authorities)
• Employer's liability insurance if you employ staff

Local licensing authorities may also have additional requirements before issuing a taxi licence. Always check with your council or licensing authority before starting work.

Can I Use Normal Car Insurance for Taxi Work?

No. Standard private car insurance does not cover carrying passengers for payment or reward.

If you use your vehicle as a taxi without specialist cover, your insurer may refuse any claim and your policy could be invalid.

Taxi drivers must have dedicated hire and reward insurance that reflects the type of work they carry out.

For example:

Before you take out taxi insurance coverage, you’ll need…

A valid UK driving licence

It goes without saying that you’ll need a valid UK driving licence before you can drive a taxi. Thankfully, there is no special ‘taxi driving licence’ - a regular licence is all you need. However, you’ll need to have held your licence for at least 12 months (3 years in London).

Record and DBS checks

Many local authorities (and Transport for London) also demand that drivers have a clean record, with no DUIs (Driving Under the Influence), or serious speeding offences.

You’ll also need to do an enhanced Disclosure and Barring Service (DBS) check, which is a detailed look into any convictions, cautions or warnings you may have had.

Failure to provide the above could mean your local authority denies you a taxi licence.

Local authorities may also require you to pass a taxi driving exam, through providers like IAM RoadSmart and The Blue Lamp Trust.

Taxi Insurance UK: Types of Cover Explained

Whether you plan to pick passengers up by the roadside, or do pre-booked trips only, you’ll need a special type of insurance designed for taxis.

There are two main options for UK taxi drivers (Public or Private Hire), plus another for London black cabs. There’s also short term taxi insurance, and ride-hailing insurance.

Here’s a close look into what insurance taxi drivers need.
 

Public Hire Insurance

Confusingly, Public Hire Insurance goes by some other names, including Hackney Carriage Insurance and Public Taxi Insurance. This insurance type is for taxis that can be flagged down or hailed by members of the public.

It is designed to cover specific risks associated with hackney carriage taxis - chiefly those related to picking up passengers on public streets.

What’s usually covered?

• Covers third-party liability, passenger liability, and damage to the vehicle.
• Includes coverage for picking up passengers without prior booking.
• Often includes public liability insurance to protect against claims from passengers or the public.
  
  

Private Hire Insurance (Private Hire and Reward)

Private Hire Insurance - also known as Private Hire and Reward Insurance - meanwhile, is designed for pre-booked taxis.

You’ve probably seen notices like ‘pre-booked journeys only’ on private hire taxis; this underlines the fact that you can't just hail down or hop in a pre-booked taxi if you see one by the side of the street, because they’re not insured for such activities.

This type of insurance is for traditional pre-booked taxi firms, as well as for Uber drivers (although specific ride-hailing cover is also available - see below).

What’s usually covered?

• Covers third-party liability, passenger liability, and damage to the vehicle.
• Specifically covers pre-booked trips only (not roadside pickups).
• May include additional coverage for lost bookings or business interruption.
  
  

PCO Insurance - for London Black Cabs

A third type of cover is PCO insurance. This stands for Public Carriage Office, and is a legal requirement for black cabs and mini cabs operating in the Transport for London (TfL) area.

It works in a very similar way to Public Hire Insurance, but relates to London.

Short-Term Taxi Insurance/Part Time Taxi Insurance

Another, lesser known, type of cover is Short Term Taxi Insurance, which is sometimes called Part Time Taxi Insurance. As these names imply, this cover is for those who plan to operate a taxi service in the short term, usually from one week upwards.

It’s typically a lot cheaper than annual taxi insurance, whether of the public or private kinds.

Uber and Ride-Hailing Insurance Explained

Drivers working for ride-hailing platforms such as Uber, Bolt and FREE NOW require specialist Uber insurance or ride-hailing cover.

Although ride-hailing drivers operate similarly to traditional private hire drivers, insurers recognise that app-based driving comes with unique risks, including frequent passenger pick-ups, variable working hours and higher annual mileage.

What's usually covered?

Hire and reward cover

Third-party liability protection

Passenger liability cover

Cover while logged into the app and accepting jobs

Optional comprehensive vehicle protection

Some ride-hailing platforms provide limited insurance benefits while drivers are working, but these should not be viewed as a replacement for a dedicated taxi insurance policy. Drivers should always check exactly what protection is included.

Insurance for taxi drivers: Coverage levels

Just as with regular car insurance, you’ll be able to choose different coverage levels, namely:

• Third-Party Only (cheapest, but minimal protection)
• Third-Party, Fire & Theft (mid-range)
• Comprehensive (most expensive, but best protection)
  
  

Public Liability Insurance - Required by most Councils

Alongside one of the insurance types above, you’ll also probably need Public Liability Insurance. Most councils will ask to see evidence of this before issuing a taxi operating licence.

Even if it’s not required, it’s extremely prudent to have it in place.

Public Liability Insurance covers you if your taxi injures (or even kills) a passenger or member of the public, or damages their property somehow. It’s sometimes bundled with the above types of cover, but not always. It covers you for any legal fees that might arise from the above events. Such fees can be considerable, which is why Public Liability Insurance is likely to give you peace of mind when doing your job.

Employer’s Liability Insurance – Required by law (If you employ others)

This is legally required if you hire other drivers or staff, as defined under the Employers’ Liability (Compulsory Insurance) Act 1969.

You’ll need a minimum cover of £5 million.

This covers you as an employer if an employee is injured or falls ill due to their work, or sustains damage to their property.

It also covers you for legal costs, should an employee sue you due to alleged work-related health issues.

It would also cover compensation payments - as might be awarded for medical costs, loss of earnings, or successful settlements etc.

Note that former employees can also make a claim if they develop health issues relating to the work they did for you. Any associated costs would also be covered under this insurance.

Other useful insurance for taxis in the UK

• Breakdown Cover – Not a legal requirement, but breakdown cover for your taxi is essential for avoiding long downtimes. Because you could break down a long way from home, it’s sensible to have Nationwide Recovery as part of any policy. Other useful benefits for taxi drivers include Home Assist, Key Assist, and Emergency Overnight Accommodation.
• Personal Accident, Legal Expenses, and Windscreen Cover – Optional but useful for financial protection.

If you work with a ride hailing app like Uber, you may have coverage for some of the above.

Average Taxi Insurance Cost in 2026

The taxi insurance cost you pay depends on factors such as your location, driving history, vehicle type, annual mileage, claims record and level of cover.

As a general guide, average annual premiums in 2026 are:

Drivers operating in large cities often pay higher premiums due to increased traffic levels and greater claim frequency.

Ways to Reduce Taxi Insurance Costs

Finding cheap taxi insurance can be challenging, particularly for new drivers. However, there are several ways to reduce premiums without sacrificing essential cover.

Tips that may help lower costs include:

• Choosing a vehicle with a lower insurance group
• Building a No Claims Bonus
• Paying annually instead of monthly where possible
• Increasing your voluntary excess
• Comparing multiple insurers and brokers
• Installing approved security devices
• Limiting annual mileage if practical

While cost is important, drivers should ensure their policy provides adequate protection for the type of work they undertake.