The UK saw a drastic fall in taxi driver numbers as the COVID pandemic hit, with the demand for public and private hire trips dwindling. Many taxi drivers saw this as the right time to pivot their taxi offering to a food delivery service. Not only does this give a stable and secure income in turbulent times, but it also offers flexible hours and less financial stress.

A word of caution here. Before you transition from taxi driver to a new food delivery business, it is worth taking note of a recent story covered in the Liverpool Echo entitled: ‘’Takeaway driver reported for ‘not having correct insurance’ business’’ and stated that ‘’A takeaway driver was pulled over by police last night for driving illegally. Police noticed the driver after they were delivering food without the correct insurance.

Merseyside Police further tweeted: “This food delivery driver didn’t have the correct insurance on his policy to enable him to use the vehicle for business and as such was reported for using the vehicle without insurance.”

So, if you are thinking of transitioning your taxi business into fast food delivery you should be aware that it is not just a simple case of plonking a curry on the front seat and off you go. You need specialist food delivery insurance to enable you to operate legally and safely.

Plus, there are also a couple of insurance add-ons to protect both you, your precious cargo and your hungry customers.

Here is some advice on the correct fast food delivery driver insurance you might need.

Fast Food is Big Business

The landscape of food is changing at a rapid pace in the UK. As well as being a source of happiness and nutrition, food is Britain’s biggest employer, accounting for 4.1m jobs totalling £212bn in grocery sales alone. The figures are staggering.

The food delivery company Just Eat services more than 60,000 restaurant partners, covering 95 percent of the UK. In the new gig economy, one-in-nine employees in the UK now works at night, the highest proportion since records began.

Online food delivery company Deliveroo says on-demand grocery delivery is now the fastest-growing part of its business and it works with more than 1,500 grocery partners.

With the food delivery sector booming, a number of taxi drivers are looking at how to incorporate this new revenue stream into their business. Before making any changes, it is vital that drivers contact their insurance broker to verify that their public or private hire taxi insurance covers them for any different or additional business activity.

Fast Food Delivery Driver Insurance

As a Hackney cab or private hire taxi driver looking to supplement your income in this particularly challenging environment, you are superbly placed to pivot your business through to food delivery. You have the vehicle, the driving experience, the local knowledge and the people skills to adapt. In addition, there is no limit to the number of app-based delivery businesses you can work for at any one time, so there are plenty of opportunities.

If you are going to approach any food delivery companies including Uber Eats, Deliveroo or Just Eat, having hackney carriage taxi insurance or private hire taxi insurance will not offer sufficient cover and all the app-based delivery providers will stipulate the need for additional courier or fast-food delivery driver insurance.

The good news is that some insurance companies have agreed to offer their policyholders fast food delivery driver insurance cover at no additional cost if you already have a taxi insurance policy with them. It is in recognition of the fact that many of their clients in the hackney cab and private hire taxi business are struggling through the COVID pandemic and need that extra support in these challenging times.

Whilst most taxi drivers will already have ‘hire and reward’ as part of their taxi insurance policy, this will only cover you for passengers and their possessions. If you are looking to transport food, you will need specific insurance for any new aspects of your business. Failure to incorporate a change of use for your taxi business could leave you at risk of any future claims not being upheld.

Courier Insurance

Switching from carrying passenger’s luggage to parcels or food may seem quite straight forward, but there could be some limitations to the hackney cab or private hire taxi insurance policy you have already agreed with your broker.

With any fast-food delivery business, you will be facing challenges of fulfilling multiple deliveries in a hurry and under pressure, making you more prone to accidents. Added to this, your precious cargo could also be subject to loss, theft, delay or damage in transit. Courier insurance protects you, the vehicle you drive and the items you transport. Tradex includes £10,000 goods in transit cover as standard on the courier product. Higher limits are available. 

As well as protection for the road risks you face, your insurance broker will need to find you a policy that includes goods in transit insurance, with a value to meet your expenses should you suffer theft, loss, or damage while you are transporting goods from one place to another in the course of business.

Whether delivering fast food or packages, public liability insurance will also help to protect you especially if you are responsible for food safety and hygiene. This will make sure you are covered should a customer have an accident or become ill because of something that happened whilst transporting your cargo.

If you are considering becoming a courier or fast-food delivery driver in addition to your current taxi business, contact your insurance broker to make sure that you are fully covered for all eventualities.

So, together with your courier insurance or business van insurance, you will need cover for:

• Goods in transit
• Public liability
• Employers’ liability

Changing Your Insurance

If you decide to increase your business from just private hire taxi work to a food delivery courier, you will need the correct insurance to protect you against the specific risks you face.

As a food courier delivery business, you will spend much more time on the road, increasing your chances of being involved in an accident or suffering loss due to delays. You will also likely to be working in more city areas with greater volume of traffic. 

If you already have a taxi policy in place, you will be covered by road risks insurance. When changing to a new career, it is worth double checking that the road risks insurance you have in place is still suitable for your business needs moving forward.

The three main levels of road risk insurance include:

Third party only: This is the minimum level of legal cover and will protect third parties in the event of an accident. However, this means you and your vehicle are not covered in the event of an accident which is deemed your fault.

Third party fire and theft: Includes the same level of cover as third party only with the addition of protection for fire or the theft of your vehicle.

Comprehensive: Provides the same cover as third-party fire and theft but also protects you and your vehicle for any damage sustained due to an accident. With the increased level of driving you are likely to do as a courier, it is always recommended to look at a road risks policy that includes protection for you and your vehicle as this is essential for the running of your business.

Many insurance options remain the same whether a solo food delivery driver or looking after a fleet of cars. These are some of the areas that you should be discussing with an experienced motor trade insurance broker such as Tradex to ensure you will be fully covered for all eventualities.

• Loss or damage to your cargo
• Loss or damage to your vehicle
• Vehicle recovery 24/7 in the event of a breakdown or accident
• Damage to your vehicle’s windscreens and windows
• Replacement locks if your keys are stolen or lost
• Protection for your company as well as the general public, including costly legal fees and help towards medical expenses
• Protection for your drivers and other employees

Courier Insurance Upgrade

When taking out courier insurance, the business premiums will be more expensive than general private vehicle insurance due to the additional risks associated with the higher mileage and wear on the vehicle, multiple address drop-off stops which could be in unfamiliar territories, and the pressure of working against the clock to deliver food within a guaranteed time slot.

Unlike private or public hire taxi insurance, fast food delivery courier insurance includes goods in transit cover up to an agreed amount, which protects the items you deliver should they be lost, damaged (food spoiled) or stolen.

Goods in Transit Insurance

Similar to changing any business activity, food delivery carries with it particular risks that are different from those encountered when taxi driving. Any of your delivery contents could be lost, stolen or even damaged in transit, particularly when you are up against some very tight deadlines and visiting multiple locations in a day.

Together with protection for the road risks you face, your insurance broker should provide policies that come with goods in transit cover included as standard up to a value of £10,000. Goods in transit insurance covers items from theft, loss or damage while they are being transported by your vehicle from one place to another in the course of business.

When choosing the right goods in transit insurance, you need to look carefully at the range of policies available to find the one that is right for your business. Some vehicle or courier insurance policies might include an element of goods in transit cover, but the amount may be restricted to smaller levels than you need. The standard £10,000 may seem adequate when you are starting out, but at busy times such as Christmas, you need to ensure you will not be out of pocket should damage or loss occur.

Remember also that while it is not a legal requirement to have goods in transit insurance cover, it is recommended and less likely that a restaurant chain will employ you unless cover is in place

Public Liability Insurance

Tradex include £2,000,000 public liability cover as standard under the courier product. Higher limits of indemnity are available upon request. 

Public liability insurance is not a legal necessity, but it is a sensible precaution if the business involves contact with any third party such as the customer you are delivering to or even a pedestrian which could be harmed while you are out driving.

If anyone were to be injured or their property damaged, you could potentially face costly legal action and medical or repair bills. For example, if you were handing over a bag of Balti curries and the bag breaks emptying its contents over a customer’s brand-new white carpet, they could claim you were responsible for the damage and demand you pay for its replacement or even sue for damages.

You may not need public liability insurance if you are an employee of another company (for example, you are employed by and only deliver for a local restaurant). It is likely the company already has public liability insurance in place, but always ask to be certain and double check that the cover is sufficient for your business needs.

Employers’ Liability Insurance

If you are thinking of expanding your business and employing additional drivers or even other employees, you are legally obliged to put employers’ liability insurance in place. It protects the interest of employees and supplements the company’s own health and safety procedures.

This will protect you should a driver be injured during their daily business activities and claim from the company for any damage, injury or loss of income.

Breakdown Cover

Having a food delivery business means that you need your car fixed quickly if it has any issues. Having breakdown cover allows your vehicle to be fixed roadside or towed to the nearest garage.

Some breakdown policies will also include a courtesy car so you can continue with your business while your vehicle is out of action.

Vehicle Modifications

You might want to include fixtures such as a chiller or heating units inside your vehicle to keep the food fresher for longer, particularly if you are making multiple deliveries.

Remember that when making any modifications to your business vehicle, it is important to let your insurer know in advance of any changes intended. Failure to make this declaration could leave your claim at risk of being rejected in the event of an accident and failing to disclose any modifications when applying for your courier insurance could lead to your policy being invalidated.

If you have insurance policy refused or cancelled, it may be much harder and more expensive to get cover in the future.

What can be less clear is just what counts as a modification in the eyes of your insurer, as this can vary for different motor trade insurance companies. When taking out an insurance policy you need to be as upfront as possible about any modifications either you, or a previous owner, have carried out to the vehicle so that you are fully covered.

Removing and replacing seats to install a chiller or heater, changing the pedals or the steering wheel are all considered to be key modifications that need to be reported to your insurance provider.

Keeping Safe and Legal

As well as having the right fast food delivery insurance in place you also need to ensure your vehicle is roadworthy. You will be travelling many miles every day, so essential daily checks will help to keep your vehicle moving so you do not miss valuable deliveries.

Daily checks for your vehicle

• Ensure that your windows, windscreen and all mirrors are free from any obstruction, such as items on your dashboard, and clean them regularly to avoid grease and dirt that can cause a restricted view.

• When using your vehicle more often, bulbs are likely to blow more quickly. Check all lights are working, including headlights, indicator lights, brake lights and reversing lights.

• With busy streets and frequent deliveries, brakes need to be in tip top condition. Be aware of any juddering, vibrating or making a screeching noise that will all indicate they are not working correctly.

• If you notice the vehicle pulling to one side, this could indicate a brake issue. It may also mean that your tyres need a rebalance, especially if you have been driving on uneven or pot-holed roads. It could even be just a pressure issue and they mean need some air.

Weekly checks:

• Tyres can wear relatively quickly when driving in poor road conditions, especially in winter when potholes and damaged roads are more prevalent from rain, frost or snow damage. Inspect pressure and tread regularly - cars, light vans and light trailers legally require 1.6mm. There must be significant tread across the middle three-quarters and around the entire tyre and they must be free of any cuts and bulges. Always check your tyre pressure at the very start of your journey as warm or hot tyres can give the wrong reading.

• Check to see where the level of the brake fluid lies. It should be within half an inch or so of the cap. If it is on the low side, add the recommended brake fluid for your vehicle (found in the vehicle manufacturer’s manual). Low brake fluid may result in brake failure and a serious accident. Learn to recognise the low fluid warning lights if your vehicle has them fitted.

• Make sure engine oil levels are in accordance with the manufacturer’s handbook, and if low top up with the recommended oil for your vehicle.

• It is essential the water level in the radiator or expansion tank is sufficient as well as the windshield washer fluid levels for front and rear windows. Add anti-freeze liquid to windshield wiper fluid to prevent it freezing up during the winter months.

• Check that battery power is sufficient. Look out for any warning lights that could indicate your battery is losing charge and needs replacement. In ideal conditions, a car battery is expected to last between 3-5 years. Poor driving habits, electronic demands or even the climate can all affect the longevity of a battery, so it is worth having its performance evaluated once it reaches three years to ensure you are not caught out with a flat.

Points on Your Licence

The Royal Society for the Prevention of Accidents (RoSPA) safety tips include a reminder that it is illegal to use a handheld mobile phone while driving, whether for calls, texts, taking photos or using social media. This is pertinent because many food delivery drivers use apps on their phone to monitor workload and communicate with customers.

The penalty for using a hand-held phone while behind the wheel is a £200 fine and six points on your licence and, if a collision happens while using your phone for any reason, you could be charged for careless driving. You will also lose your licence if you passed your driving test in the last two years.

If you are taken to court, you could be banned from driving or riding and receive a maximum fine of £1,000 (£2,500 if you are driving a lorry or bus).

Remember, if you do incur any fines or penalty points due to poor roadworthiness or other driving infringements, it is an offence under the Road Traffic Act 1998 not to report this to your insurance broker. Some insurers only ask you to do this at renewal time, while others may expect you to tell them as soon as a conviction occurs, so check your terms and conditions.

If you do not declare your points and then make a claim, your insurer could refuse to pay out and your policy would become null-and-void. This will also make it difficult to get another courier insurance elsewhere, so it is worth being as upfront as possible.

Most experienced motor trade insurance brokers understand the problems that courier, and taxi drivers face and will try and work with you to get around increased premiums due to penalty points.

Driving can be a stressful activity and doing it for work tends to be risker than driving for private reasons. People who drive professionally are more likely to crash even after their higher mileages are taken into consideration.

When changing any insurance policy or making additions, it is important to speak to an experienced motor trade insurance broker such as Tradex who have decades of experience working with both taxi and courier drivers. We also offer preferential rates for those who want to update a policy that is already with one of our insurance companies.