Hire and reward insurance

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What is hire and reward insurance?

Hire and reward is a form of courier insurance, covering delivery drivers as they make their stops. 

A normal car insurance policy, otherwise known as social, domestic & pleasure (SD&P), won’t work. This is because dropping off parcels is seen as a riskier investment on the behalf of the insurers, meaning specialist cover is required.

As there’s a higher chance of claims being made, hire and reward cover is typically more expensive than standard car or motorcycle insurance. However, there isn’t any getting around it. All companies which hire contractors to deliver goods will require some form of courier insurance, with hire & reward being the most common.

Generally, hire & reward is broken down into three types, depending on what you will be delivering. 

• Taxi/chauffeur: Transporting people and their possessions e.g Uber
• Food: Picking up and delivering food e.g Just Eat
• Courier: Dropping off packages to multiple locations e.g Amazon

Cover is also available on a range of vehicles, ranging from bikes to HGVs. So, whatever your circumstances, you should be able to find suitable cover.

Do I need hire and reward insurance?

While this will of course depend on your situation, if you're going to be delivering something for payment, some type of courier insurance is required by law. Delivery companies in general won’t hire you if you don’t have appropriate cover, as this leaves them exposed. 

Some companies will provide a certain level of cover for contractors, but generally you will need to have your own insurance as well.

This doesn’t mean that hire & reward is the only type available. Amazon, for example, also accepts a business class 3 policy. However, if you opt for one of these make sure to check the details, as what they include can differ from insurer to insurer.

Hire and reward insurance, however, remains more or less uniform across different providers, with extra protection available for those that need it. 

What does hire and reward insurance cover?

Much like normal car insurance, hire & reward comes with three different levels of protection:

• Third party only: The most basic type of cover, third party only pays out on any damages done to a third party if you get into an accident.
• Third party, fire & theft: Provides all the protection that third party only offers, but also covers you if your car is stolen, or damaged by fire.
• Comprehensive: Offers all the protection of third party and fire & theft, as well as coverage for any damages to your own vehicle, should you get into an accident.

While these provide the basis for all policies, there will also be additional types of cover available, more suited to working as a delivery driver. For example, you may choose also to include:

• Goods in transit insurance: Covers the cost of any damaged or lost packages.
• Public liability insurance: Protects you against any compensation claims you fall foul of as a result of your work.

How much does hire & reward insurance cost?

This will depend on exactly what you are delivering, and the type of cover you go for. If you are delivering antiques, and opting for a policy with all the bells and whistles, you are going to pay more than someone driving for Uber Eats with third party only protection.

As with SD&P cover, there will be numerous personal factors that an insurer will take into account. These will include:

• What type of vehicle you have
• Your driving history 
• Where you live / keep your vehicle overnight
• Your age

Aspects of your work may be factored in as well. For example, drivers who work long hours at night and operate in areas with high crime rates will pay much more than couriers who only work in quiet neighbourhoods during the day time.

How to get cheaper hire and reward insurance

To bring your monthly premiums down, you need to demonstrate to your insurer that you are not a risky investment. While many factors are out of your control, choosing to deliver in less expensive vehicles and picking safer areas to work in, might help to minimise costs.

As always, the easiest way to get cheaper insurance is to shop around, so make sure you’ve checked all the deals available on the market before you commit.