Taxi Insurance: Companies, Cost, Quotes & Liability

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Not all have the qualifications to become a driver for mainstream online transportation platforms. For one, Lyft has a very strict background check. Uber is forgiving but signing up as a driver might be difficult still. And so, some stick to being taxi drivers.

If you're offering a taxi service, including an unmarked car service using your personal vehicle, it is essential that you maintain adequate taxi business insurance coverage.

Given the high possibility of different exposures happening, particularly relevant to the constant driving conditions of a car-for-hire service, you need to make sure that your taxi, your business, and your customers are well covered.

In fact, regional regulatory statutes provide that the legal operation of a taxi service requires industry-standard minimum property damage and personal injury coverage included in taxi insurance. After all, in car crashes, a taxi can cause as much damage as a limousine.

Our discussion today will look into the nook and crannies of taxi insurance. Understand how it will help, what are the inclusions, how much to pay for premiums, and which companies offer the best coverage.

What is Taxi Insurance?

Taxi service has rushed onto the global service industry scene. Many urban residents are forgoing personal car ownership in favor of using smartphone-app ride-hailing services which are convenient, hassle-free and economical. For many workers, having a side-hustle for extra income is now possible by using a personal vehicle and without requiring the excessive certification processes typical of the old-school taxi industry. 

Tailored taxi business insurance and taxi driver insurance are products insurance companies especially underwrite for private for-hire taxi businesses, public hire taxis, Uber, Lyft, and others.  Regardless if you use an economy or luxury car as a taxi, you need to have commercial taxi insurance as protection.  There are many inclusions in taxi and transport insurance. Nonetheless, the one you’ll always find in the quotes of taxi insurance companies is liability insurance. 

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Taxi Liability Insurance

The primary coverage companies offer to taxi business and drivers is liability insurance. Liability insurance has different forms. And what’s available for you is general liability insurance. General liability insurance is available as long term or short term taxi insurance policy, which provides coverage for the following perils:

Coverage	Function
Third-Party Personal Injuries	Your taxi operations will injure third parties such as clients, contractors, and other third parties. General liability insurance will pay the medical expenses of people you injure
Third-Party Property Damage	Your taxi operations will cause property damage. Aside from personal injuries, general liability insurance will also reimburse the losses of third parties whose personal effects were damaged by you
Legal Expenses	Third parties might take legal action after you inflicted them with injuries or property damage. In such a situation, general liability insurance takes care of attorney fees, court payment orders, and other legal costs

Insurance companies allow you to get more from general liability insurance. This comes at a price though. But even so, consider investing more on premiums so that general liability give you these additional protections:

Advertising Injury Coverage	Rented Premises Liability Coverage
A third party might sue your taxi business for slander, libel, breach of confidentiality, copyright infringement, false advertising, and other related acts. If this happens, general liability insurance added with advertising injury coverage will cover attorney fees, court payment orders, and other legal costs	If you’re renting a commercial space for your taxi operations, don’t hesitate to add rented premises liability coverage to general liability insurance. The commercial space you’re renting might get damaged or destroyed because of fire and general liability insurance with rented premises liability coverage will reimburse the landlord for you

Taxi Public Liability Insurance

Public liability insurance for taxi services is a coverage that is necessary for any business dealing directly with the general public.  The function of general liability insurance and public insurance are the same -  that is to cover personal injury claims and property damage claims third- parties file.  But you should remember that unlike general liability insurance, public liability insurance can’t be added with products and completed operations coverage or rented premises liability coverage. This means that its scope is more limited. 

If you’re a taxi driver renting a taxi or using an owned taxi, then getting public liability insurance is the best option. However, if you’re running a taxi service business employing multiple drivers and taxi vehicles, the best option is general liability insurance. 

Commercial Auto Insurance for Taxi Service

Another inclusion in tailored commercial taxi insurance is commercial auto insurance.  It is important to note that commercial auto insurance policies for vehicles (whether a marked taxicab or private vehicle for hire through an app service) differ from personal auto insurance. It is essential that all taxi operators carry commercial auto insurance because it provides the following comprehensive protections:

Coverage	Function
Auto Liability Coverage	Your taxi will cause an accident either by crashing into a vehicle or an object. If it inflicted injuries to third parties or damaged someone’s property, auto liability coverage in commercial auto insurance will cover expenses for the medical treatment of injured parties and reimbursements of damaged property. Understand though that auto liability coverage won’t provide help if your taxi caused an accident due to its involvement in the following criminal activities - DUI, overspeeding, and more
Physical Damage Coverage	No one will ride a taxi that looks damaged and worn. This is why commercial auto insurance for taxis has physical damage coverage. Physical damage coverage has two forms - collision and comprehensive. Collision physical damage coverage will cover parts repair or replacement if the taxi got damaged after colliding with a vehicle or an object. Comprehensive physical damage coverage will shoulder expenses if fire, theft, vandalism, and other covered perils damaged the taxi
Emergency Roadside Assistance	A taxi constantly runs on the road and it will experience occasional defects. This will result in an interrupted trip. But still, it needs to get back up and running no matter what the issue is. Emergency roadside assistance coverage in commercial auto insurance will reimburse what was spent on roadside assistance services such as battery jump-start, gas delivery, tire repair, tire delivery and replacement, and more
MedPay/Personal Injury Protection	MedPay/personal injury protection is a very essential coverage in commercial auto insurance for taxis. MedPay and personal injury protection will cover the medical treatment of passengers and the driver who got injured after the taxi caused an accident or got involved in an accident

Taxi Fleet Insurance

Taxi fleet insurance or commercial fleet insurance is very useful when running a taxi service business owning three or more taxis. By the way, dump truck, tractor, heavy equipment, and seasonal snow plow businesses are all examples of business types that also need to get commercial fleet insurance.  

Commercial fleet insurance isn’t different from commercial auto insurance. It has the coverages discussed in the previous section too.  But there’s one thing that makes commercial fleet insurance unique, that is you can insure three or more taxis under one insurance policy. Commercial fleet insurance is advantageous because its premiums are cheaper than when you get separate commercial auto insurance for multiple taxis. 

Also Read: Limousine Insurance: Limo Insurance Cost & Quotes From $11

Taxi Service Business Commercial Property Insurance

As a taxi business, you’re using a commercial space serving as an office, taxi terminal, and warehouse for supplies. You have to get that insured too. And to do so, purchase commercial property insurance. Commercial property insurance primarily covers these perils:

Building Destruction	Building Damage
If your taxi business’s commercial space gets destroyed by fire or extreme weather, commercial property insurance will reimburse your investment	Fire, extreme weather, theft, vandalism, and other covered perils will damage your taxi business’s commercial building, and commercial auto insurance will reimburse your investment equal to the value of damaged structures

Pay more on commercial property insurance premiums and you’ll enjoy protection against damage to business equipment and building contents. Additional inclusions in commercial property insurance are:

Stocks and Contents Coverage	Business Equipment and Tools Coverage
Within the premises of your taxi business’s commercial space are computers, office furniture, CCTV cameras, and other valuables. When these become damaged or destroyed due to fire, theft, vandalism, and other covered perils,  commercial property insurance with stocks and contents coverage will reimburse losses equal to the value of items lost or damaged	Commercial property insurance added with business equipment and tools coverage will reimburse losses if the equipment your business is using to maintain and repair its taxis becomes lost or damaged due to fire, theft, vandalism, and other covered perils

Business Owner’s Policy for Taxi Service Business 

Do you plan to get commercial property insurance and general liability insurance? If this is the case, don’t buy the policies separately. We suggest you look for an insurance company offering a business owner’s policy for taxi businesses. 

A business owner’s policy is a fusion of commercial property insurance and general liability insurance added with one or two inclusions. For example, a business owner’s policy will also offer workers' compensation insurance, cyber liability insurance, business interruption insurance, etc. 

Taxi Workers Compensation Insurance 

Workers' compensation insurance is useful whether you’re driving your own taxi or running a taxi service business. You never know when you yourself or employees might experience a work-related accident. Work-related accidents are often costly and workers' compensation insurance will pay for the following expenses on your behalf:

Coverage	Function
Employee Treatment/Medical Procedure	Driving a taxi exposes you or employees to numerous injuries. One of the functions of workers' compensation insurance is to shoulder the cost of surgeries, therapies, and other medical treatment/procedures
Hospitalization	Some injuries will require extensive stays in the hospital. Workers' compensation insurance ensures that you continue healing without any problems by taking care of hospital bills
Medication	If your doctor or an employee's doctor, recommends medicines, workers' compensation insurance also provides coverage. It will cover expenses for medication no matter what kind of drug you or an employee needs to fully heal
Rehabilitation	Your injury or an employee's injury might result in impairment. In line with this, rehabilitation might be required to reverse the effects or mitigate the reduction in the quality of life. It’s also the job of workers' compensation insurance to cover the therapist fees and other rehabilitation expenses
Lost Income Compensation	Workers' compensation insurance will also help if you or an employee can’t drive the taxi and not generate income due to an injury. This insurance provides a weekly allowance equal to two-thirds or 67% of the average weekly wage. Say, if the wage is $678 per week, a $460.29 weekly allowance will be received as compensation for lost income
Death Benefits	Workers' compensation insurance provides death benefits if you or an employee dies due to work-related hazards in taxi service

How Risky is a Taxi Business?

Workers' compensation insurance is very useful since there are many work-related hazards when operating a taxi. Here are some recorded incidents from the Occupational Safety and Health Administration:

Temporary Taxi Insurance 

Temporary taxi insurance is primarily offered as tailored monthly taxi insurance or weekly taxi insurance having general liability insurance and commercial auto insurance as the primary inclusions. Insurance premiums are paid daily or weekly depending on your choice. Note that the cost is more expensive than long-term taxi insurance. 

Airport Taxi Insurance

There’s tailored airport taxi insurance for taxi drivers and taxi businesses specializing in airport transfers. The primary inclusions are general liability insurance, commercial auto insurance, and cargo insurance. 

Taxi Insurance Requirements 

As a taxi driver or taxi service business, you must carry the minimum commercial auto liability coverage mandated by your state. Getting general liability insurance is recommended but not required. 

If you’re planning to be a driver for Uber or Lyft, you must get commercial auto insurance and add Uber and Lyft as additional insureds. You can get insurance coverage from commercial insurance companies, Uber, or Lyft.  

Taxi Insurance Cost

The average taxi insurance cost is about $78 per month or $936 per year for $1 million general liability insurance. However, the average taxi insurance price will depend on many factors, the more drivers and vehicles your taxi business has, the more your taxi car insurance cost will be. Also, your taxi service insurance requirements may vary according to your state’s minimum insurance regulations. In addition, here’s a table showing the best taxi insurance companies:

Remember, when searching for cheap taxi insurance quotes, that you need to make sure you are adequately covered in order to mitigate the potentially catastrophic financial implications of an accident. If you are driving with the Uber service, remember that your third-party and commercial operations may be fully or partially covered by Uber’s insurance provisions. Double-check the Uber policy with your insurance broker to be certain you are covered for your circumstances and vehicle use.

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