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Couriers and delivery
Hire and reward insurance is motor cover for using a vehicle to carry goods or passengers for payment. Without it, a private policy usually will not cover paid deliveries, and the driver may be treated as uninsured.
Part of: Commercial vehicle insurance
In short
Hire and reward means carrying goods or people in return for payment. UK motor policies are written for a stated use, and the Road Traffic Act 1988 requires cover for the use of the vehicle by the person driving it. Social, domestic and pleasure, commuting and most business-use policies exclude hire and reward, so a delivery driver on one of them is often driving outside cover. The insurer may still have to pay injured third parties but can then recover from the driver. Hire and reward cover does not protect the goods themselves.
In motor insurance, hire and reward means using a vehicle to carry goods or passengers for a fee, fare or other payment. It is the use that couriers, delivery drivers, removals firms and hauliers need. Passenger carrying for fares is a separate class, written as taxi or private hire cover, which we cover on our taxi insurance page. This guide explains the concept; our hire and reward insurance page covers the product.
The phrase also appears in law. Section 145(4)(d) of the Road Traffic Act 1988 lets motor policies exclude damage to goods carried for hire or reward, and the goods vehicle operator licensing guide describes operator licences as needed for heavier vehicles carrying goods for hire or reward or in connection with a business.
Insurers name their classes in different ways, so treat this as a general guide and read your own schedule and certificate.
| Class of use | What it usually allows | Paid deliveries? |
|---|---|---|
| Social, domestic and pleasure | Personal journeys, shopping, visiting friends | No |
| Commuting | As above, plus travel to and from a permanent place of work | No |
| Business use | Travel in connection with your job, such as visiting clients | Usually no; carrying goods for payment is commonly excluded |
| Carriage of own goods | Moving your own business's goods or tools | No, unless the goods belong to customers paying you to carry them |
| Hire and reward (goods) | Carrying other people's goods for payment | Yes, subject to the policy terms |
| Fast food delivery | Delivering takeaway food for payment | Yes, for food delivery as described |
Section 143 of the Road Traffic Act 1988 makes it an offence to use a motor vehicle on a road or public place without a policy in force for that use by that person, as the CPS guidance on road traffic offences explains. If your certificate shows social, domestic and pleasure and you are being paid to deliver, the delivery journey is commonly outside the cover. GOV.UK lists a £300 fixed penalty and 6 penalty points, or an unlimited fine and disqualification in court, and the police can seize the vehicle.
Third parties are protected to a degree. Section 151 requires insurers to satisfy certain judgments for compulsory liabilities even where they could avoid or cancel the policy, and in some cases lets them recover what they paid, including from the driver or from a policyholder who caused or permitted the use. A delivery driver can end up personally owing the insurer the cost of a third party's claim, as well as losing cover for their own vehicle. Where no insurer is liable at all, victims may have to turn to the Motor Insurers' Bureau.
If you start delivering part-way through a policy year, tell your insurer before you take any paid job. Some will change the use on the existing policy and others will ask you to move to a courier or delivery product. Either way, the change should show on your certificate, not just in an email. The same applies if you buy a van for the work: our commercial vehicle insurance guide explains how van policies are usually described.
Section 150 of the Road Traffic Act 1988 treats some passenger journeys as within a private policy even if passengers contribute. The vehicle must not be adapted to carry more than eight passengers and must not be a motorcycle, the fares must not exceed the running costs of the journey, and the arrangements must be made before the journey begins. It is a narrow rule for sharing costs. It does not cover carrying goods for payment and does not turn delivery work into private use.
Even with the right motor cover, the goods in the vehicle are usually excluded. That is why couriers and removers add goods in transit insurance, which covers the load subject to limits, conditions and excluded goods. Read our courier insurance hub for how the covers fit together and our short definition of hire and reward for a quick reference.
Insurers also usually want to know about the drivers, the vehicles and the type of work. Multi-drop parcel work, same-day courier work and food delivery are often rated differently, so describe the work accurately; our multi-drop courier guide explains why. The goods in transit definition sets out how load cover is usually written. Our guide to the duty of fair presentation explains why this matters at a claim.
Illustrative. A driver with a social, domestic and pleasure policy starts doing evening parcel drops for extra income. On the third evening they reverse into a parked car while dropping a parcel. The insurer learns the journey was paid delivery work.
The safer route is to arrange the right use first. Self-employed drivers should also read our guide to self-employed delivery driver insurance.
Apex arranges courier and delivery cover, including goods in transit, for sole traders, multi-drop operators and small fleets. A broker reads each enquiry and comes back with options, and there is no fee for a quote. Cover is always subject to the insurer's acceptance and the policy terms. To quote we need your business activities, turnover, location and claims history, plus the vehicle, each driver's details, whether the work is parcels, same-day courier or food delivery, and roughly how many hours a week you deliver.
It is motor insurance that covers using a vehicle to carry goods or passengers for payment. For goods, it is the class couriers and delivery drivers need. It covers third-party liabilities and, if chosen, damage to your own vehicle, but it does not usually cover the goods you carry.
Usually not. Business use normally covers travel in connection with your work, such as visiting clients. Carrying other people's goods for payment is commonly excluded unless hire and reward is shown on the certificate. Check your certificate wording before you take on any paid delivery.
It can be. The Road Traffic Act 1988 requires insurance for the use of the vehicle by the driver. If paid delivery is outside the policy, the driver may be using the vehicle without insurance, which GOV.UK says can lead to a £300 fixed penalty and 6 points, or more in court.
No. Section 150 of the Road Traffic Act 1988 applies to passengers paying fares that do not exceed the running costs of the journey, arranged beforehand, in vehicles carrying no more than eight passengers. It does not cover carrying goods for payment.
In some cases, yes. Section 151 of the Road Traffic Act 1988 requires insurers to satisfy certain judgments for compulsory liabilities even where they could avoid the policy, but the insurer can then recover what it paid from the person responsible for the uninsured use.
Tell us what your business does, your turnover and any claims. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Start a commercial enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
