Hire and Reward Insurance
"Hire and reward" is one of the most misunderstood terms in commercial vehicle insurance — and getting it wrong is one of the most common reasons claims are rejected. If you carry goods or passengers belonging to someone else in exchange for payment, this is very likely the type of cover you need, regardless of whether the work is full-time, part-time, or occasional.
This guide explains what hire and reward insurance actually means, who needs it, and how it differs from standard business use cover.
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What Is Hire and Reward Insurance?
Hire and reward is a specific use class within commercial vehicle insurance that applies when a vehicle is used to transport goods or passengers belonging to someone else, in return for payment. It's distinct from "business use," which generally covers using a vehicle for your own business's purposes — for example, carrying your own tools, stock, or travelling between job sites.
The key distinction is simple to state but easy to get wrong in practice:
- Business use — using the vehicle for your own business (e.g. an electrician driving to jobs with their own tools)
- Hire and reward — using the vehicle to carry goods or people that belong to someone else, for payment (e.g. delivering parcels for a client, or driving passengers for a fare)
Many drivers assume a standard business-use policy automatically covers occasional paid delivery or transport work. It generally doesn't — hire and reward needs to be specifically included, and its absence is a frequent cause of claim disputes. For a detailed side-by-side comparison, see business use vs. hire and reward.
Who Needs Hire and Reward Insurance?
You likely need hire and reward cover if you:
- Deliver parcels, food, or other goods for payment, including through delivery apps or platforms
- Drive passengers for a fare (taxi, private hire, or minicab work)
- Carry goods for clients as a courier or logistics contractor
- Occasionally take on paid delivery or transport work alongside other use of the vehicle
- Run a business that transports goods or people belonging to third parties
This applies whether the work is your main income or a side activity — insurers generally assess the activity, not how much of your time it takes up.
What Does Hire and Reward Cover Typically Include?
| Cover type | What it generally includes |
|---|---|
| Third party | Damage or injury you cause to others while carrying out hire-and-reward activity |
| Third party, fire and theft | The above, plus your own vehicle if stolen or damaged by fire |
| Comprehensive | The above, plus damage to your own vehicle regardless of fault |
| Goods in transit | Often needed alongside hire and reward to cover the value of goods carried — see our goods in transit guide |
| Passenger liability | For hire and reward involving fare-paying passengers rather than goods |
Hire and reward is typically an extension or a distinct policy type rather than a simple add-on tickbox — the underlying cover (third party, third party fire and theft, or comprehensive) still needs to be chosen separately.
Common Exclusions and Misunderstandings
- Assuming business use covers occasional paid delivery or transport work — this is the single most common misunderstanding
- Not disclosing a change in vehicle use when starting delivery or courier work on a vehicle previously insured for personal or business use only
- Carrying goods above a declared value without separate goods-in-transit cover
- App-based or platform delivery work not being disclosed, where a policy requires specific activities or clients to be named
- Assuming a single hire-and-reward policy covers all types of paid work — some policies distinguish between carrying goods and carrying passengers
What Affects the Cost of Hire and Reward Insurance?
- Type of activity — carrying goods vs. carrying passengers are priced differently
- Frequency — full-time hire-and-reward work typically costs more to insure than occasional use
- Driver history — points, claims, and years of experience
- Vehicle type and value
- Mileage, which tends to be higher for delivery and courier work
- No claims history
How to Compare Hire and Reward Insurance Properly
Before comparing options, it helps to be clear on:
1. Exactly what you're carrying — goods, passengers, or both 2. Whether the work is full-time, part-time, or occasional 3. Any platforms, apps, or clients the work is done through 4. The typical value of goods carried, if relevant 5. Any driving history or claims that could affect available options
If you're unsure whether your current policy already includes hire and reward, it's worth checking the policy documents directly — the wording is usually explicit about which use classes are covered.
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Get Matched With an FCA-Authorised Broker
InsuranceCare doesn't sell insurance policies or provide regulated advice. If you'd like to be contacted about your options, we can pass your enquiry to an FCA-authorised broker or insurer on our panel, who can discuss your specific situation and provide a quotation.
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