Uber Eats, Deliveroo, Amazon… if anyone with a driving licence wishes to supplement their income, the options are there. Whether the pay and working conditions will prove acceptable is another matter altogether – and one to cover in another blog – but the question stands: are these drivers correctly insured?

The parcel and food delivery industries are booming and getting transformed by the gig economy. Students, part-time workers, public and private hire drivers may find it an appealing way to earn more money, working as and when they want to. However, many might not be aware of the type of insurance needed to carry out such activities or the limitations of the cover they are using.

Simple “Social Domestic & Pleasure” or strict “taxi and private hire insurance” policies will not provide cover for delivering Big Macs for UberEats, or ferrying Amazon grocery bags around. A courier policy is needed. It’s an important point to make because the cover required is significantly more expensive.

Courier policies cost more for a reason – due to the challenge of fulfilling multiple, time critical deliveries in a high pressure environment, courier drivers tend to have more accidents than other motorists. So potentially many of the companies that are at the forefront of the emerging food delivery market could be gaining an unfair advantage by using drivers who are avoiding (whether knowingly or not) a significant overhead. Additionally ordinary motorists may be supplementing their insurance costs via their higher premiums.

What is “Hire and Reward” insurance?

Hire and Reward Insurance is a type of insurance that covers you to carry goods or passengers in return for payment. Typically, taxi and private hire drivers, chauffeurs, food delivery drivers and couriers will all need some form of Hire and Reward insurance.

What the policy covers, however, depends on the occupation you declared when arranging cover.

All insurance policies come with either a Proposal Form (PF) or a Statement of Fact (SOF). On these documents, it will confirm your details – such as Name, Address, Date of Birth, Claims, Convictions etc.

One of the questions will be, ‘What is (are) your occupation(s)?’

Options could be:

• Public Hire Driver
• Taxi Driver
• Chauffeur Driver
• Private Hire Driver
• Private & Public Hire Driver
• Courier
• etc.

Also, it will show any other occupations declared – such as Shop Work or Office Admin etc.

Now, since this document is used to form the basis of the insurance contract, the declared occupation(s) is (are) what the insurers are covering you for… Quite simply, if the documents only state ‘Private Hire Driver’, then this is what you are getting covered for, and NOT for being a goods delivery driver.

However, it is worth noting that a Taxi Driver, a Private Hire Driver or a Chauffeur can carry packages, parcels and luggage etc. during the course of their work: if this is in connection with the job they declared when purchasing the policy, then their insurer will cover them in the event of a claim (policy limits and exclusions apply).

Let’s take the example of a private hire driver, with a hire & reward policy, having declared as sole occupation: “private hire”.

In the event of a claim, the insurance provider will ask the question: ‘what was the purpose of your journey when then the incident occurred?’

If the explanation fits in with the occupation declared (i.e. “they were following a lead vehicle with clients’ luggage or parcels”), then the insurer will cover (policy limitations and exclusions permitting).

However, if the driver was working to deliver an Amazon parcel at the time of the incident, then the insurers would deem this NOT to be related to the occupation they have declared, and they would decline cover;  this would be deemed either Courier or Light Haulage use of the vehicle and not, in our example, “Private Hire” use. We have spoken to leading insurers and they have confirmed that they would reject any claims on this basis should they come to light .

Is it possible to get cover for both passengers and goods?

It is possible to declare that you are both a Taxi or Private Hire driver and a Courier, and therefore be covered for both. For the reasons stated above, if you are already a Private Hire driver wishing to add cover for courier purposes, it is likely that your insurer will charge you a higher premium.

Also certain companies like Uber or Amazon may offer add-on options to cover specifically the deliveries made for the particular purpose of delivering their goods. Beware though, as:

• Such an add-on could invalidate your main policy – we strongly advise you to speak to your broker or insurer to ensure that they are happy to cover a vehicle also covered by another company;
• Look at the fine print (what’s the excess, what is covered and when – i.e. is your journey to pick up a parcel from/in the warehouse covered by this add-on?)

One last point for drivers providing food delivery services to consider is on the subject of liability. Have you checked whether the app provider you’re working for will accept responsibility for complaints relating to food safety and hygiene? Often to save costs, fresh food, such as chicken is being delivered in cool boxes rather than purpose built refrigerated vehicles that the likes of Sainsburys, Tesco or Waitrose, etc might use.

So, for example: if a long delay occurs due to severe traffic on a very hot day the cool boxes used to store the food may not remain sufficiently cold for the extended duration of the trip. The recipient of the order may take delivery of contaminated food, fall sick as a result and lodge a claim for compensation. Who will pick up the bill? Public liability is included with many “hire and reward” policies but in these circumstances, it’s unlikely your motor insurer will accept liability, especially if you’ve not declared your occupation as a food delivery driver.

To summarise, if you wish to be covered for both the transport of passengers and goods, you must declare that you are a Taxi or Private Hire Driver and a Courier Driver, and get appropriate cover. Many drivers may ignore this fact and be operating uninsured unknowingly. We have raised the issues relating to invalid “Hire and Reward” cover numerous times in this industry. However, sadly, the regulators and other authorities don’t seem to want to take swift and robust action.