As a hackney carriage or black cab taxi driver, finding insurance that suits all your needs can be demanding. Choosing the right insurance company at the right price for your business is important for your livelihood and the smooth running of your service.
At Tradex, we have more than 50 years’ experience insuring black taxi or hackney carriage drivers. When it comes to public taxi insurance, we know how important it is to be confident that you are fully covered, and your business protected whether you operate a single vehicle or run a taxi fleet.
Here is our guide to hackney carriage and black cab insurance, with advice on how to find the best policy for flexibility and affordability.
What is Black Cab & Hackney Carriage Insurance?
Black cab or hackney carriage insurance is a specific type of public taxi insurance for those who have passed The Knowledge exam (if London-based) and have a licence to drive a black cab. As a professional taxi driver, you need the proper protection to cover you, your vehicle and your passengers.
According to Transport for London’s Public Carriage Office (PCO) there are more than 21,000 black cabs currently operating in London. But, with a population of nearly nine million, there are plenty of passengers to go round.
While the black cab may be an iconic symbol of London, they are increasingly common in other large cities too including Liverpool, Manchester, Birmingham, Cardiff, Edinburgh and Glasgow. You won’t necessarily need to take The Knowledge, but other cities do have their own tests in place before you can apply for a licence.
Why Can’t I Just Use Private Hire Taxi Insurance?
Whilst private hire taxi insurance may be the cheaper option, this is not acceptable for a public hire taxi. Unlike private hire taxis (that need to be booked in advance), a black cab has significant rules and regulations. It’s also important to point out that the cab doesn’t necessarily need to be black and can in fact be any colour.
According to Transport for London rules and regulations, these include:
• A black cab will have a 'for hire' light on their roof. This means they can be hailed on the street or from a taxi rank.
• A black cab can also be pre-booked.
• Hackney carriages must accept card and contactless payments without surcharge.
• A black cab must carry assistance dogs free of charge and be 100 percent wheelchair accessible. Black cabs have an induction hearing loop, high-visibility grab handles, and minimum vehicle dimensions for safer access and must carry wheelchair users.
• The fares are regulated and set by Transport for London or other city authorities. They are calculated by meter (known as the taximeter).
• All black cab or hackney carriage drivers must pass enhanced Disclosure & Barring Service (DBS) background checks and regular medical checks (see below).
What Do I Need to Become a Hackney Carriage Taxi Driver?
If you are planning on becoming either a hackney carriage driver or a private hire taxi driver, you will need to apply for a licence. How you do this will depend on the location in which you are intending to trade. If you’re planning to work inside Greater London your licence application will be with Transport for London (TfL).
For work within other city areas, you will need to get in touch with your local council. You can find them on www.gov.uk/find-local-council. Requirements will vary, but there are some general documents you will have to provide on application:
• A full valid driving licence that has been held for a minimum of 12 months and which is registered with your current address. Any points on your licence will also need to be declared.
• You will need to prove that you have a legal right to live and work in the UK.
• You must sign to say that you have read and understood the taxi licensing policies issued by your local authority.
• You will have to be issued with a medical certificate from your GP surgery to say that you are fit and healthy. You must also be able to submit an eyesight test. These checks need to be paid for by yourself and are not currently available for free under the NHS regulations.
• Your local council will follow up any application for a taxi licence with a disclosure and barring service (DBS) check. This is to ensure you don’t have any previous convictions or cautions that may legally prevent you from driving the general public.
How to Pass the Public Taxi Driver Tests
To drive a hackney cab, you will have to pass a test showing your understanding of the local area and geography. In London this is well-known as The Knowledge. This involves learning the quickest routes within a six-mile radius of Charing Cross, and on average takes three to four years to learn.
Most city authorities will also have their own local knowledge test which is usually multiple-choice. This generally includes identifying the location of key buildings or premises including pubs, bars, train stations, schools, village halls, golf clubs, supermarkets and business parks.
You may also be required to pass a multiple-choice theory test examining the highway code, road signs and routes and are likely to also need to take a language test. Not all authorities require proof of English and many just ask you to provide documentary evidence of your English language ability, such as a GCSE, NVQ, A Level, or degree certificate in any subject taught in English.
What Hackney Carriage & Black Cab Insurance Do I Need?
As a hackney cab or black cab driver, you are required by law to have the minimum level of public taxi insurance and you will not be able to operate a taxi business without it. Black cab or hackney carriage insurance is designed to protect you, your business and your passengers. It will make sure you are covered from any legal action against you, personal financial issues due to accidents and protection for any damage or injury you may cause to your vehicle and to others.
There are three main types of hackney carriage or black cab insurance:
• Third party insurance: This is the cheapest and minimum legal level of insurance you must have to drive a taxi. Third party hackney cab insurance will only cover you for damage and injury caused to passengers and their belongings while you are working. You will not be covered if your taxi were to be damaged or you were injured and it was deemed your fault. Whilst this may be the less expensive form of insurance, not being able to work due to injury and the cost of paying for your vehicle’s damage could lead to the long-term failure of your taxi business.
• Third party, fire and theft: This covers the cost of damage and injury you may cause to others while driving your taxi (the same as third party insurance above), plus it has the additional cover of damage from fire or if your vehicle is stolen.
• Comprehensive black cab insurance: As the name suggests, this is the highest level of public taxi insurance, but this will be reflected in the cost. It includes all the above but will also protect you and your vehicle should you be involved in an accident for which you are at fault. In addition, it covers you for any legal fees, as well as loss of earnings due to illness or injury, enabling you to keep your business afloat whilst recovering.
When selecting which type of black cab insurance policy to choose, you will need to decide who will be named on the policy. The choices include:
• Sole driver policies: Where only the owner can drive the taxi.
• A named driver policy: Where anyone named on the policy can drive the vehicle (this can be useful if you are sharing the taxi with another driver).
• An ‘any driver’ policy: Where anyone employed by a taxi company can drive the vehicle (more common for PCO or private hire companies).
What Else Does Black Cab & Hackney Carriage Insurance Cover?
As well as road risks insurance that will be covered under your third-party or fully comprehensive package, you should also look out for some other policy elements that may be included or need to be added as an extra option.
1. Public liability: Many cabbies make the decision to take out public liability insurance, which protects them should a passenger make a claim for injury or damage to their belongings if you’re at fault. In effect, this cover protects you against legal claims from passengers. You don’t necessarily need to take this out as an additional policy to your hackney cab insurance as most taxi insurers allow you to add it on to your black cab insurance policy as an optional extra.
2. Employer’s liability: This insurance is a legal requirement if you employ any staff for your business. This protection offers coverage in case the employee is involved in an accident or causes damage while in the taxicab.
3. Legal expenses coverage: This protects you against legal expenses—it steps in to pay legal costs in case you’re sued by passengers, or for damage you may have caused in an accident while on the job. This should be included either in fully comprehensive road risk insurance or as part of public liability insurance. Check your terms and conditions to make sure you aren’t paying twice for the same cover.
4. Breakdown & roadside assistance: Often included as an add-on, this will be essential if you want to keep moving and make sure your passengers arrive at their destination. As well as covering you in case your vehicle breaks down while you are on the road, the policy will often include the arrangement of onward transportation for your passengers.
5. Home start recovery: Again, this is probably an add-on to your public taxi insurance, but it can be a lifesaver. If you park your taxi at home and it refuses to start, this coverage can help you get up and running quickly, so you can get on collecting fares.
How much does hackney carriage insurance cost?
There are many factors that may affect the cost of your public taxi insurance. This includes:
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Age and experience: Though you cannot be licenced to drive a black cab until you are 21 (this is the Public Carriage Office’s (PCO) minimum age requirement when issuing a London taxi or PHV licence), some taxi insurers have a minimum age limit that is above the PCO’s threshold and will only offer public taxi insurance if you are at least 24 years old. If you haven’t accrued any no claims or experience, you will find you have to pay considerably more for your insurance. Insurance brokers such as Tradex may be able to offer you ways to build-up your no claims more quickly and support new badge holders to get started. Look at our Bonus Booster programme to help younger drivers (put a link in here).
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Where your taxi business is based: Being based in London will make your public taxi insurance more expensive than suburban areas, but the benefits should outweigh the costs in terms of volume of business.
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How many hours you’re on the road and how many miles you cover each year: being on the road for a longer length of time leaves you more prone to accidents and breakdowns. This will be reflected in your policy premium. It is important to be accurate with your mileage estimates to make sure you remain covered.
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A fully comprehensive policy: It’s essential to shop around and find an insurance broker like Tradex that has decades of experience when it comes to taxi insurance. Going fully comprehensive doesn’t necessarily mean you will have to pay out considerably more sums than third party and the benefits generally far outweigh the costs if you get the right package for your business.
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Checking the small print: Make sure you look at all your policy covers – some insurers may offer additional benefits that will make the policy more cost-effective in the long-run.
How Can I Reduce My Black Cab Insurance Costs?
1. Choose to pay your black cab insurance annually: As with motor trade or general car insurance, many taxi insurers will give cabbies the option to pay for their black cab insurance on either a monthly or an annual basis. Monthly payments can be more convenient, especially when starting out in business when cashflow is tight but choosing to pay for your policy annually will help to reduce your insurance premiums.
2. Check Local licensing regulations: Each location or council has its own specific rules and regulations when it comes to licensed taxis. So, the first thing to investigate is what’s required where you plan to operate. If you fail to check the regulations, you may end up buying the wrong insurance and this will have an impact on your costs and the long-term future of your business.
3. Comprehensive insurance: As mentioned previously, this type of cover is more expensive, but it may save your business considerable sums in the future, especially when business really begins to pick up. Both your vehicle and your business (including income) will be protected, and you can have peace of mind that if you are involved in an accident, you will be fully covered against injuries and any legal fees.
4. Accruing your no claims discount: If you have been a careful driver for a while, you should have gained a significant number of years with no claim’s bonuses. This will help you to reduce the cost of your annual insurance premiums.
5. Parking your black cab in a driveway or private garage: While off-duty, try to find a safe and secure place to park your vehicle. Taxis that are parked on busy city streets are more likely to be involved in an accident or targeted by criminals. If you can prove that you park your taxi in a private garage or driveway when you’re not working you should be offered cheaper hackney carriage insurance quotes.
6. Security discounts: Increasing your taxi’s security can help to lower premiums. If you have fitted special alarms, steering locks or even trackers, check to see if your insurance broker offers a special discount as a result, or ask what security measures need to be put in place to lower your premium.
7. Consider a black box for your black cab: This is something more often associated with young drivers and may be a great way for those who have just passed their test to prove their driving skills. If you are a relatively inexperienced taxi driver and you’re keen to cut the cost of your public taxi insurance, you could consider installing a black box tracking device in your vehicle to monitor your driving habits. This could even reduce your premiums by 20 percent, which is a significant amount when you are starting out.
8. Comparing insurance brokers: When looking for the right black cab insurance policy, it may seem wise to jump on a comparison site. But this could mean you end up with a general insurer who knows little about the taxi business and could mean a more expensive outlay for you further down the line. Do your research and find taxi insurers such as Tradex who have been insuring black cabs for over 50 years. An insurance broker with taxi experience will tell you exactly what you need to get up and running and is happy to discuss long-term loyalty discounts. Make sure you have plenty of questions prepared and be ready to query a response, especially if you don’t understand something. Then read through the policy and the terms and conditions thoroughly to ensure you are getting the policy that is right for your business.
Where to Buy Black Cab & Hackney Carriage Insurance?
It is possible to purchase black cab insurance from general insurers. However, a specialist taxi broker will have the knowledge and understanding of the taxi business and help to keep premiums within your budget cutting out any add-ons that you might not need, especially in the early days of your business.
What About Getting Cover for Electric, Hybrid or LPG Cabs?
With a future focus on going green in many UK cities, plenty of taxi drivers are already investing in hybrid or electric vehicles. The initial costs can be high, but running expenses are generally cheaper and you will be best placed to increase your business as cities move further towards zero carbon emission zones.
Tradex already has specialist insurance companies covering all taxi types from hybrid or electric to LPG conversion.
Hackney Cab Rules
Finally, if you want to maintain a reasonable black cab insurance policy, you need to observe the hackney carriage rules. The following can mean increases in your premium or, worse still, that your policy becomes null and void.
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Giving the Wrong information when applying for your hackney cab licence: If you give false information when you apply for a taxi licence, you will have committed an offence and can incur a fine. If the owner of a taxi business allows a person to drive a taxi for them knowing their details are incorrect, they will also be liable for a fine.
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Taxi drivers overcharging passengers: Charging passengers more than the fares authorised by the local authority or even prolonging a journey by taking a longer route, can lead to a fine of £1,000. Taxi passengers are also within their rights to request a refund of the amount that was overcharged.
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Penalty points and disqualification for taxi drivers: Penalties for taxi offences include fines, licence points, disqualification and the loss of the taxi licence. Penalty points can seriously inflate your insurance premiums and make renewing your policy difficult.
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Driving without a valid black cab or hackney carriage taxi licence: If caught, you could face a fine of up to £2500, plus if the insurance then becomes invalid, you will face a further charge of driving without insurance.
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Driving without public taxi insurance: You could face a maximum fine of £5000, six to eight penalty points and the possibility of a 12-month driving ban.
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Smoking while driving a taxi: If you smoke in your taxi, regardless of whether you had any passengers present at the time, you could face a £50 fine.
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Drink driving penalties: If you are found to be over the legal alcohol limit while in charge of your taxi, you can be fined up to £2,500. Added to this will be the charge of drink driving that can include a custodial sentence and a fine of up to £5,000. Up to 11 penalty points or a ban can also be applied in some cases of ‘drunk in charge’ and you could also be looking at a driving disqualification if you attempted to drive your vehicle.
Tradex offers taxi insurance policies for both private hire and public hire taxi businesses. We are competitively priced, working with several leading specialist insurers, and are amongst the most flexible insurers on the market with policies designed for supporting individual drivers of all ages to taxi fleets.