Hire And Reward Insurance: What Is It And Who Is It For?
When you’re in the business of transporting passengers or other people’s items, there are specific legal requirements that you must have, such as business insurance. Your drivers must have hire and reward insurance as protection when delivering passengers or packages. Here are the basics of hire and reward insurance and its purposes.
Hire And Reward Insurance Defined
A driver must have insurance coverage, primarily if the vehicle is used for livelihood. That means there’s more risk of getting into an accident the more an individual travels on the road. There are various insurance coverages that you can get for delivery personnel, such as courier van insurance. But if you need more passenger coverage and items, seek hire and reward insurance instead.
Who Should Carry Hire And Reward Insurance?
Hire and reward insurance applies to employees and those who are self-employed (or not included in your payroll). Individuals working as the following should carry this insurance policy:
- Private or public taxi drivers
- Courier vehicle drivers
- Funeral vehicle drivers
- Hauling or removal drivers
- Chauffeurs
- Minicab drivers
- Fast-food delivery
- Towing drivers
- Van courier drivers
- Parcel delivery
It’s also known as a class 3 business insurance required for drivers. Transport and delivery businesses associated with some delivery apps also have this type of insurance because apps will only work with drivers with business protection.
Why Is Hire And Reward Insurance Necessary?
There are various types of insurance appropriate for the role of a driver. It’d help if you had hire and reward insurance to carry goods and transport people because it’s a legal requirement. Having your drivers covered by the policy is what it means to be compliant. A general business insurance policy also doesn’t cover essential items, so choosing the type of policy you need in your driving-related job is essential.
The rule applies even if the driver delivers small items while riding a motorcycle or scooter. That’s because using a vehicle on the road always has risks, such as getting into an accident. If the passenger has been injured, you’ll need this unique insurance to cover medical expenses.
If parcels or packages sustained damages or packaged food has been ruined on the way, the policy would pay for it also. This way, you can avoid lawsuits and protect your assets because you’ll be able to pay for damages, and the money won’t come from your savings. Operating a business without the policy will also result in significant fines.
What Does Hire And Reward Insurance Cover?
Hire and Reward insurance is a policy that covers the loss and/or damages of the goods that are being delivered during work hours.
Hire and reward commonly covers the following:
- Sustained personal injuries
- At the event that the vehicle is stolen
- Being involved in a road accident
- When the vehicle is broken into
The policy will also cover legal costs, vehicle damages, personal injury compensation, and repair or replacement for the vehicle. The hire and reward policy also covers all types of vehicles, such as motorbikes, cars, and vans. The coverage depends on the occupation you declared and arranged for when applying for the insurance policy.
The insurance contract will differ depending on the occupation, meaning if you’re a private-for-hire driver, terms for a food delivery person won’t apply to you. It does come with the exception that if you’re a driver who transports people, such as a chauffeur or a taxi driver, and you declare that you’re also carrying luggage, packages, and the like, hire and reward policies will also cover them. Note that exclusions and limitations will apply.
Can I Bundle Hire And Reward Insurance With Other Policies?
Aside from hire and reward insurance, there’s another coverage you can choose to bundle with the former. It’s called the Domestic and Pleasure policy, which covers the personal use of a vehicle. It is also known as SD&P or Social, domestic and pleasure policy. It’s mainly for those working as self-employed delivery drivers who are also using their vehicles.
Insurance that applies to self-employed drivers can be murky, mainly because they’re not directly employed as a delivery person by a fast-food restaurant. Some insurance providers are also offering these policies as a bundle.
In Conclusion
Hire and Reward insurance is an essential policy for drivers transporting people and goods. The policy is unique because of the nature of the occupation it was designed for, mainly for protecting specific drivers and their vehicles. It’s also essential to explore options and add-ons to ensure the driver is well-covered. Those who choose to skip insurance will find that it’s more expensive not to insure someone or oneself if working as self-employed.
