Unlike cars, taxis require a specialist insurance company to underwrite given the increased risk associated with driving them. Private vehicles are used to transport a smaller number of people to and from work, and for weekend socializing, which means they’re on the road less and thus less of a risk to the insurance company. Give the mileage and number of passengers transported in a taxi (and minibus taxi) per day, the risk is multiplied.
Specialist insurance companies, like Clarendon Transport Underwriters, cater for taxi insurance by providing them with comprehensive cover as well as passenger liability and personal accident for drivers.
Types of taxi insurance
As with car insurance, taxi insurance can cover the vehicle comprehensively or for third party liability. That is, the taxi can be covered for accidental damage, theft, hijacking, fire, explosion and damage to third party property, or for third party property only. For third party taxi insurance, the insurer only pays out for the damage caused to other people’s property, and not for accidental damage caused to the taxi itself. It is a cheaper insurance than comprehensive insurance as it excludes cover such as personal accident and passenger liability.
Liability taxi insurance
As taxis are in the business of public transport, taxi insurance usually includes cover for passengers and liability for drivers. While road accident victims claim from the Road Accident Fund, the amount paid out rarely covers all medical fees. For additional claims of personal injury or accident, comprehensive taxi insurance includes passenger liability insurance. It also includes personal accident cover to cover medical expenses on the part of the driver who may likewise be injured or suffer loss in an accident.
The amount paid out is usually predetermined in the insurance contract. The insurance company will usually pay out a set fee per passenger and a fee for the driver for personal accident cover. For companies which run multiple taxis, a combined fleet and taxi insurance policy will spread the risk of accident, passenger liability and personal accident cover for drivers across the whole taxi base, making it more affordable.
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