In the UK insurance market, “Hire and Reward” insurance and “Goods in Transit” insurance are two distinctly different insurance products. They meet different needs within the transport and logistics sector. Here’s a breakdown of the differences between the two:
Hire and Reward Insurance
Definition: Hire and Reward Insurance is a type of vehicle insurance that covers vehicles used to transport goods or passengers in return for payment. It is also known as ‘carriage of goods’ or sometimes ‘Courier’ Insurance’ for hire and reward, or shortened to H & R Insurance. It is essential for businesses that involve the transportation of goods, parcels, or passengers in exchange for payment. In fact in the UK – Hire & Reward Insurance is a legal requirement if you are transporting goods, passengers, or hiring out your vehicle in return for a fee. It is typically associated with industries such as delivery services, courier companies, taxi services, private hire vehicles, and haulage contractors.
Whether you are an Amazon driver, offer a Taxi Service like Uber, or deliver food for Just Eat, Hire & Reward Insurance is there to cover you in your work. Having Hire & Reward Insurance means that you are covered for any damage and repairs to your vehicle should you have an accident and also, this insurance covers any 3rd party damage if the claim is related to the vehicle claim. it provides cover should someone get injured in an accident.
If you encounter an issue with yourself or your vehicle while delivering goods and you do not have a specific Hire & Reward Insurance policy, any resulting losses would not be covered.
So whether you are dropping off parcels, people or fast food, you should check out this cover. Note that fast food delivery platforms like Uber Eats, Just Eat or Deliveroo might have specific requirements. Also important to note is that whilst Hire and Reward Insurance protects your vehicle, it does not cover the goods that you carry in it. The goods inside the vehicle would need to be covered by a separate ‘Goods in Transit’ policy.
Key Features:
1. Coverage: This insurance covers the vehicle and driver (you) for problems resulting from your job of transporting goods or passengers for commercial purposes- that is, you get paid to transport goods or people. It covers you for any damages or vehicle repairs that may be needed following your involvement in an accident. It can also include public liability cover to protect you against the cost of claims and legal representation if somebody gets injured or hurt.
2. Who Needs It:
o Taxi drivers (private hire and public hire)
o Couriers and delivery drivers
o Haulage and freight companies
o Waste and refuse collectors
o Food delivery
o Removal services including furniture removers (both Domestic & Commercial)
o Vehicle transportation
3. Legal Requirement: It is a legal requirement for any vehicle operator who uses their vehicle for commercial purposes involving the transport of goods or passengers for hire and reward.
4. Types of Coverage:
o Third-party only
o Third-party, fire, and theft
o Comprehensive
What is Goods in Transit Insurance?
Definition: Goods in Transit Insurance covers the goods or merchandise being transported from one location to another. This insurance protects against damage, loss, or theft of goods while in transit.
Key Features:
1. Coverage: This insurance covers the goods being transported, regardless of the mode of transportation (road, rail, sea, or air).
2. Who Needs It:
o Businesses that ship products regularly
o Transport and logistics companies
o Couriers and delivery services
o Retailers and wholesalers
3. Scope of Protection: Protects against risks such as:
o Accidental damage
o Theft
o Loss
o Damage due to unforeseen events (fire, accidents, etc.)
4. Customised to you: Policies can often be tailored to specific needs, covering a single shipment or multiple shipments over a period. Talk to the experienced advisers at BCD for more help in this area.
Summary of Differences
| Feature | What is Hire and Reward Insurance? | What Is Goods in Transit Insurance? |
| Purpose | Covers vehicles used for transporting goods/passengers for payment. So if your business involves transporting passengers or goods for payment, it’s highly likely that you’ll require this type of insurance. | Covers goods being transported |
| Who Needs It | Taxi drivers, couriers, hauliers, removal services | Businesses shipping goods, logistics companies, retailers |
| Coverage Focus | Vehicle and driver liabilities ie any damages or vehicle repairs plus as legal expenses and compensation if somebody gets injured. | Goods being transported |
| Legal Requirement | Yes, for commercial transport of goods/passengers. you will be charged with an offence if you do not have Hire and Reward while working as a courier or haulier. | No, but often required to win contracts and is good idea to protect your business and reputation should a claim occur. |
| Typical Risks | Covered Covers your vehicle but not the goods carried | Damage, loss, theft of goods in transit |
| Types of Coverage | Offered Third-party, third-party fire and theft, comprehensive | Customised policies based on the nature of goods and transit routes |
If you are a courier, delivery driver or operate a taxi service, you should also consider having Public
Liability Insurance , which protects your business against any claims made by third parties for
damage or injuries resulting from use of the vehicle for hire and reward purposes.
Investing in the right insurance is not only a legal obligation but it is a key part of running a
responsible business.
Hire and Reward Insurance
As the gig economy grows, characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs, the demand for flexible and affordable hire and reward insurance is likely to increase.
Talk to us at BCD as we can undertake thorough research, understanding your specific needs, and helping you to take proactive steps to reduce your premiums. Having the optimum hire and reward insurance, which gives you the necessary protection for your business, means that you can operate with confidence and peace of mind.
Get a quote or call us on 0344 776 5301
Can I update my Hire and Reward Insurance policy?
Yes, you should update your policy to reflect any changes in your business operations or assets. This can easily be done by talking to BCD when you take a policy out through us.
What should I do if I need to make a claim?
Report the incident to your insurer immediately, provide necessary documentation, and follow up regularly to ensure a smooth claims process.
How can I lower my Hire and Reward Insurance premiums?
You can lower your premiums by maintaining a clean driving record, choosing the right coverage level, and speaking to a broker like BCD.
Is Hire and Reward Insurance mandatory?
Yes, in many places, it’s a legal requirement to operate a hire and reward service.
What is the difference between Public Hire and Private Hire Insurance?
Public Hire Insurance is for vehicles that can be flagged down by customers on the street, while private hire insurance is for vehicles that must be pre-booked.
Business Choice Direct Insurance Services is a trading name of Specialist Broking Retail Limited who are authorised and regulated by the Financial Conduct Authority. Specialist Broking Retail Limited is registered in England and Wales No. 10301653. Registered Office: Affinity House, Bindon Road, Taunton, Somerset, TA2 6AA.