Operating a minibus or multipurpose vehicle (MPV) for hire or reward can offer greater financial benefits than a saloon taxi only accommodating four passengers and limited luggage. Transporting people to and from the airport, weddings, parties, school, youth groups, the elderly excursions or even shopping expeditions are all more possible with a larger taxi vehicle.
It must be remembered though that transporting larger groups of people and their luggage also carries with it a greater element of risk and you will need to make sure you have the correct minibus and MPV insurance in place to cover those additional fares.
Tradex are one of the UK’s leading provider of minibus and MPV insurance with decades of experience in understanding the risks involved. Here is our guide and advice on the right level of insurance you will need to keep you covered in your business at the beginning and as it expands.
Choosing the Right Taxi Insurance
A taxi driver is classed as anyone who offers a service for hire and reward with the two main categories of ‘public hire’ and ‘private hire’. Public hire taxis are typically your hackney or black cab that has a taxi sign and can be flagged down in the street or pre-booked.
An MPV or minibus taxi is generally private hire which means fares need to be booked in advance and you cannot be flagged down for a journey.
If you are collecting fares and operating as a taxi, you will need to have taxi insurance in place. A taxi with a seat capacity above the regular five seats (including the driver’s seat), will need to choose a higher insurance category with a slightly higher premium, which is specifically designed for MPV or minibus taxi drivers.
MPV Taxis and Minibuses
All insurance brokers will have a different pricing structure in place for MPV and minibus insurance, including how many seats they are willing to cover.
Tradex understands the needs of a variety of its minibus companies and insures multi-seat vehicles with up to 17 seats, including the driver. As well as covering the seats, it is also important to include insurance for the passengers and Tradex also offers cover for multiple passengers including school children, youth groups, disabled passengers and the elderly.
Finding the Right Level of Cover
As with standard vehicle insurance, there are three levels of road risk insurance from which to choose as a taxi driver.
- Third party: this is the minimum level of cover available but will only cover you for damage, loss or injury to third parties while driving your MPV or minibus. It will not cover your vehicle or any personal injuries sustained during the course of your business and you could find yourself significantly out of pocket should you be involved in an accident.
- Third party fire and theft: this will give you the additional level of cover to third party should your car catch light or be stolen.
- Fully comprehensive: this will give you the highest level of protection for you and your vehicle. Your vehicle and you will be covered for any damage or injuries sustained during the course of your taxi business as well as protection for third parties.
MPV and Minibus Insurance Policies
When selecting the right MPV or minibus insurance policy, look for one that includes passenger or public liability insurance as standard. This is discussed in greater detail below but briefly this means you are protected should a passenger be injured whilst travelling in your vehicle or entering and exiting your taxi.
Other areas you should consider include:
Taxi breakdown and windscreen cover
Any taxi driver is advised to include breakdown and windscreen cover as part of their MPV or minibus insurance policy. This will help to prevent you losing out on too may fares and having ‘onward travel’ or ‘journey’ can assist your passengers in getting to their destination without too much disruption.
It is also worthwhile looking into home start recovery to ensure you can always meet any early bookings.
Business breakdown cover includes several levels:
- Roadside assistance only: this is the most basic level of cover available where you can be helped roadside if you breakdown a stated distance from your home or business.
- Roadside assistance plus vehicle recovery: if your vehicle is unable to be fixed roadside, it will be towed to the nearest garage, home or your business premises. Additional cover can include nationwide recovery, home assistance and onward travel.
- Like-for-like vehicle replacement: some policies will offer like-for-like vehicle replacements while your vehicle is being fixed in the garage or is undriveable. This means you might be able to continue working so you do not miss those vital fares.
Any location considered
You will need to make sure to include your specific areas of travel as some insurance brokers will not cover taxis that operate in some built-up areas. This will let you collect passengers from anywhere so you are not restricted in your work or fares.
Key cover
Each vehicle key insurance policy is different but the key features to consider when taking a policy are:
- Cover for the cost of locksmith charges and replacement keys and locks, generally between £1,000 and £1,500.
- Cover for the costs of replacing or reprogramming your security immobiliser or other equipment if affected.
- Breakdown insurance may offer cover for keys locked inside vehicles – some policies do while others charge for a callout locksmith so best to check in advance when taking out your policy to avoid doubling up on insurance.
- If your keys are stolen, you will need to report this to the police before you are able to receive any insurance cover.
Premises insurance
If you are operating from a premises, then you will need to make sure you have buildings and contents insurance to cover any loss from fire, floods or theft. This can also include any tools or equipment or cash kept on your premises.
If you are leasing or renting your business premises, check with your property owner as to what insurance they may already have in place as the building itself may already be covered.
Employers Liability Insurance
Since the Employers’ Liability (Compulsory Insurance) Act 1969, most UK companies are legally required to provide employers’ liability insurance. This will safeguard your business against any legal and compensation expenses that employee’s may claim from your company.
This insurance provides cover should an employee sustain an injury or fall ill as a result of the work they do for your company. This could be something as simple as slipping on a wet floor and breaking an arm preventing them from working or to more serious accidents that could lead to hospitalisation or a long-term illness.
Employers’ liability insurance will help to cover any costs that you may incur while defending a claim made against your company. Costs will include any compensation pay-outs as well as legal fees if the case ends up in court.
It is important to recognise that claims can still be made after someone has stopped working for your company, sometimes because symptoms may manifest several months or even years later.
Even though guarding against it, accidents do happen so it is vital to be prepared with employers’ liability insurance to safeguard your business from any financial repercussions. This can be a lifeline for young businesses where cash flow may be limited.
Many businesses in the UK need to have cover worth at least £5 million as soon they employ their first member of staff so it is worth taking this into account before moving from a sole trader to employing staff.
To work out how much cover you are likely to need for your business, have a discussion with your insurance broker about the risks to your business, the most serious claim you could face and how this might affect your minibus and MPV insurance policy.
Failure to have the correct employer’s liability insurance in place could leave you facing fines of up to £2,500 a day until you take out the correct policy.
Also be aware that you still need employer’s liability insurance for part-time employees, volunteers, apprentices and temporary employees you may take on to cover busy periods such as the festive season.
Public Liability Insurance
As a taxi driver, it is not always a legal requirement that you have public liability insurance though if you are hoping to do any work with your local council, schools or other organisations then it is quite likely they will stipulate that you need to be covered with a certain level of public liability insurance. It is also strongly recommended if you are carrying passengers for commercial use.
Public liability insurance is designed to protect you or your company if a passenger or member of the public claims you have caused an accidental injury or property damage during your business activities.
Public liability insurance is designed to cover legal costs and compensation if, for example, someone was to be injured getting out of your cab or you break sharply and they suffer whiplash or neck damage. It should also be noted that if you are transporting children to school in a minibus or MPV, liability covers them until they reach the school gates not just when they leave your vehicle.
This type of insurance can be tailored for businesses of all sizes, whether you are a solo driver or own a fleet of vehicles. It will also cover you should you damage someone’s property when driving your minibus or MPV, such as accidentally hitting a wall, running over someone’s property or knocking down a sign during your business day. If a claim were to be made, the policy will cover the cost of repairs or compensation you are requested to pay.
Tradex offers various levels of cover dependent on the amount of risk for your business and any stipulations from local education authorities or councils. Options of cover include £1,000,000, £2,000,000, £5,000,000 and £10,000,000.
Why Does MPV and Minibus Insurance Cost More?
Any type of taxi insurance tends to cost more than general car insurance because of the statistically higher risk of having an accident due to time spent on the road, covering many more miles than the average driver.
A taxi driver is also likely to be visiting more built-up or even unfamiliar areas and is therefore at greater risk. By driving a minibus or MPV, you will also be in a higher insurance group and therefore your insurance policy will reflect this in the policy costs.
To recap, MPV or minibus insurance costs may be higher due to:
- Covering more miles than the average motorist when driving a taxi.
- Driving in all weathers and seasons as well as being in built-up or unfamiliar areas.
- Carrying an increased number of passengers means a larger vehicles and minibuses and MPVs are more expensive to insure than a saloon car.
- Taxi drivers run an increased risk of personal injury claims being made against them by their passengers and therefore need an adequate level of public liability insurance.
Requesting a Quote from Your Insurance Broker
When applying for minibus and MPV insurance, here are some of the questions you will be asked and the information you will need to be able to provide to receive the best quote for your business.
1. Details about your minibus or MPV
You will need to provide as much information as you can about the make and model of your vehicle as well as the average mileage you do or estimate you will be doing if you are just starting out in your business.
2. How will you use your minibus or MPV taxi?
Are you intending to use your vehicle for public or private hire? We have been focussing here on private hire, but it maybe you are intending to look at a public licence. Will you be the sole driver of your vehicle or are you intending to share it with other taxi drivers?
3. Where will you drive your minibus or MPV?
Do you have set routes you are intending to cover, for example, airport or train stations? Will you offer transport for groups or organisations or rely on individual customers? Will you be intending to also use your vehicle for personal use when not driving for business?
4. Are you looking to expand in the near future?
Are you intending to own more than one taxi before the expiration of your annual MPV or minibus taxi insurance policy? Make sure any broker you choose is willing to grow and support your business as it expands so you do not have to spend valuable time looking around for a new broker each time you acquire a new vehicle and drivers.
5. How secure is your taxi?
What kind of security does your taxi have – does it have a suitable car alarm, black box, tracker, an immobiliser or any other security device? Do you park it in a locked yard or garage or is it left on a road or driveway?
6. Has your vehicle been modified in any way?
If you have made any modifications to your minibus or MPV such as installing wheelchair ramps, clamps and straps to allow ease of access for disabled passengers, you may require some additional cover so will need to let your insurance broker know.
How Can I Reduce My Minibus or MPV Insurance?
Whilst comparing quotes from insurance brokers is one of the best ways to make sure you are getting the right deal for your business, here are some other areas that can help to reduce the costs of your policy.
- Length of Your No Claims Discount (NCD)
If you have built up several years of no claims’ bonus either with the vehicle you are using as a taxi or another vehicle you drive regularly, it could help to reduce the cost of your taxi premium. Tradex also offer a special Bonus Booster for younger drivers to help them accrue a year of no claims within six months of careful driving if a policy is issued by them.
- Where you live or keep your taxi
If you live or park your taxi or operate in an area with a high crime rate, this can substantially increase the cost of your minibus or MPV insurance. If you can demonstrate you park somewhere secure or in a less crime prone area, this will help reduce your premium.
- How many miles you drive annually?
You need to give an accurate estimate of the miles you will be driving even though this may affect your insurance premium prices. When travelling longer distances, such as to the airport, you need to be able to make sure the miles are justified in the fares collected. Always be upfront about the mileage you do as going way over your estimation could lead to an invalidated policy should an accident occur.
Along with security devices, make sure if your cab is parked roadside, it is in a well-lit area or store it in secure location overnight such as a locked yard or secure private garage.
- Keep your cab well-maintained
A taxi that is well looked after with regular maintenance is less likely to breakdown or be involved in accidents. If you can show regular services and check-ups and have a low record of accidents or breakdown assistance use, it may help to prevent prices increases, especially when it comes to renewal time.
As with most types of motor trade insurance, your age when driving a taxi can affect the cost of your policy as it will correlate to the number of years you have been driving and your level of experience. All insurance companies like a number of years no claims discount and a clean driving licence. A younger age and points on your licence will all deter insurance companies from offering you a competitively priced package. If you are employing taxi drivers, it is a good idea to keep this in mind to avoid an additional driver to your policy pushing up the costs unnecessarily. Also take a look at Tradex’s Bonus Booster if you are taking on less experienced drivers.
- Choosing a named driver policy
If you are a sole taxi owner, having a named driver policy can help to reduce the cost of your minibus or MPV driver insurance. This can also work well if you have drivers that just drive their own vehicles and there is no sharing of vehicles.
This may be a better choice of insurance policy if you run a fleet of minibuses or MPVs. An all-driver cover lets any one of your drivers operates any taxi. This may be slightly higher insurance cost than a named driver policy but can allow for flexibility such as if a driver is off sick or a car is off the road.
Goods in Transit
While you may find business is brisk during certain times of the years such as the festive season or holidays if you do airport driving, there may be other times when business needs a bit of a boost.
It is possible to enhance your business model to include food delivery or even parcel. However, be aware that if you are going to offer additional services, you will need to let your insurance company know as any change to your business model can increase your risks.
If carrying food or parcels, any could be lost, spoilt, stolen or damaged in transit and you could end up liable for any damage, particularly if you are visiting many locations in a hurry or against time constraints. You may also pose an increased risk to other road users as well as their vehicles and property.
When diversifying your business, 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. While there is no law to enforce that you have goods in transit insurance cover, it is essential especially for expensive items and will protect you against compensation claims from clients.
To get the best minibus or MPV insurance, always talk with an experienced insurance broker like Tradex. We will compare Minibus and MPV insurance from a variety of leading insurance companies to find the best insurance for your needs.