Taxi Insurance Policy Information
Taxi Insurance. Taxi services - the ability to hire a driver and means of transport on a short-term basis - have, in some form, been available since at least the 17th century.
Taxi cab companies offer transportation to passengers on public roads to and from their specified destinations. Some also offer courier services that deliver packages and documents.
The taxi company's employees are usually limited to dispatchers, schedulers, and office workers, as most taxi drivers are independent contractors. Passenger pick-up may take place on the street, at taxi stands on a first-come, first-serve basis, or by specific request through the taxi company's dispatcher.
Local ordinances may prohibit a taxi company from declining service to prospective passengers, including those going to or from high crime areas.
In modern times, countless people rely on taxi services on a daily basis, whether because they do not drive their own vehicles or because cabs provide a more convenient means of transportation.
Taxi services exist on various scales, using diverse business models. While taxi companies may own a whole fleet of vehicles (which are then operated by employed drivers) as well as an office space and parking lot, even "solopreneurs" can run a very successful and busy taxi service.
To make it in the taxi business, it is crucial to get ahead of the possible risks you may face and to take steps to protect yourself from the financial devastating that may follow unforeseen, and ruinous, circumstances.
What types of taxi insurance may help you meet this goal? Find out more in this brief guide.
Taxi insurance protects your taxi cab business from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked taxi cab insurance questions:
- What Is Taxi Insurance?
- How Much Does Taxi Insurance Cost?
- Why Do Taxi Cab Services Need Insurance?
- What Type Of Insurance Do Taxi Companies Need?
- What Does Taxi Insurance Cover & Pay For?
What Is Taxi Insurance?
Taxi insurance is a type of insurance that is specifically designed for taxi drivers and their vehicles. This type of insurance provides coverage for a variety of risks that are specific to the taxi industry, including liability for accidents, damage to the vehicle, and injuries to passengers.
The primary component of taxi insurance is liability coverage. This type of coverage provides protection for the taxi driver in the event of an accident, in which they are found to be at fault. Liability coverage can also provide protection for any injuries or damages that may be sustained by passengers in the event of an accident.
In addition to liability coverage, taxi insurance also typically includes coverage for physical damage to the vehicle. This may include protection for collisions, theft, and other types of damage. Some policies may also include coverage for medical expenses for the driver or passengers in the event of an accident.
Taxi insurance policies can also include additional coverage options, such as roadside assistance, rental car coverage, and even lost income coverage for drivers who are unable to work due to an accident or injury.
Overall, taxi insurance is an essential type of coverage for anyone working in the taxi industry. It provides protection for drivers and their vehicles, as well as passengers, and can help to mitigate the financial impact of any accidents or injuries that may occur while on the job.
How Much Does Taxi Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for taxi cab services ranges from $67 to $89 per month based on location, number of taxis in fleet, revenue, claims history and more.
Why Do Taxi Cab Services Need Insurance?
Taxis need insurance for a variety of reasons, but ultimately it is to protect both the taxi company and its customers from potential financial losses.
Firstly, just like any other vehicle on the road, taxis are at risk of accidents and collisions. In the event of an accident, the taxi company could be held liable for any damage or injuries sustained by other parties. Without taxi insurance, the company would be responsible for paying these costs out of pocket, which could be financially devastating.
Secondly, taxis often transport passengers, and these passengers expect a certain level of protection and safety while in the taxi. If a passenger is injured or suffers damage to their personal property while in the taxi, the taxi company could be held liable. Insurance can cover these costs, ensuring that the passenger is taken care of and the company is not left with a huge financial burden.
In addition, taxis are usually on the road for extended periods of time and have to meet the needs of a variety of customers, which can increase the chances of them getting involved in accidents. Insurance can ensure that in case of any unfortunate incident, the taxi company will be able to bear the financial loss without affecting their business.
In summary, taxi insurance is crucial for protecting the taxi company and its customers from potential financial losses due to accidents, injuries, or damages. It is an important investment that can provide peace of mind for everyone involved.
What Type Of Insurance Do Taxi Companies Need?
The exact types of coverage a taxi service needs to protect their business depends on numerous factors. A single independent taxi driver will not have the same insurance needs as a taxi company that owns multiple vehicles and an office space, as well as being responsible for employees, for instance.
The location where you are based also plays a role in your taxi insurance needs. To make sure you are completely covered, it is therefore essential to consult a skilled commercial insurance broker who understands the taxi cab business.
Having said that, taxi services may need the following forms of coverage:
- Commercial Auto - As work-related driving is quite literally the job description of a taxi driver, commercial auto insurance is the first type of policy any taxi service needs. It protects you from financial losses in the event of a vehicle accident, theft, or vandalism pertaining to your own vehicle, third party vehicles, and the bodily injury of yourself and third parties. Due to the high risk profile of taxi services, commercial auto insurance will be more costly within your industry.
- Commercial Property - If you use a dedicated office space to book rides, you will also require commercial property insurance - which covers the costs associated with major perils such as acts of nature, theft, and vandalism that could damage your building or result in the loss of smaller assets such as computers.
- Workers Compensation - Companies with employees will require workers' comp. If an employee sustains a work-related injury for which you could be held liable, it covers their medical expenses as well as any lost wages.
There may be additional taxi insurance needs in the form of cyber coverage or general liability coverage (if they receive visitors in their office space or a re required by certain locations); these important forms of insurance are merely examples of the types you will need to protect your business. For further details, talk to a commercial insurance broker.
Taxi Service's Risks & Exposures
Premises liability exposures are limited because the public ordinarily does not have access to the office and garage. Off-premises exposures from contact with passengers usually come under automobile liability, not general liability.
The contract between the driver and the taxi company determines the extent of its liability for the driver's actions. Personal injury exposures, such as assault and battery, discrimination, or invasion of privacy, may include allegations against the taxi company for negligent hiring and supervision of contract drivers.
Workers compensation exposures vary depending on individual state laws. Drivers are usually independent contractors and are not subject to workers compensation coverage. However, exposure can be significant if the law in a specific state requires that such drivers be covered as taxi drivers work alone, often after dark, carry cash from passenger fares, and cannot generally decline service even to high-crime areas.
Drivers can be injured during hold ups, from altercations with passengers, bitten or scratched by passengers' pets, or in vehicle accidents. Handling passenger luggage and other belongings can result in strains, sprains, and back injuries. Drivers may slip and fall on ice, snow, or water, or trip over curbs.
Vehicles should be well maintained, equipped with two-way communication devices with the dispatcher, shields to separate the driver from passengers, surveillance cameras, a global positioning system (GPS), and safety equipment commensurate with weather conditions. Driver training should include how to deal with violent, intoxicated, or uncooperative passengers.
Mechanics can be exposed to toxic fumes from refueling and repair operations. These should be done in well-ventilated areas. Exposure to asbestos may result from repairing brakes.
Property exposures are from office and dispatch operations. Ignition sources include electrical wiring, heating, and air conditioning systems. If vehicles are stored and maintained on premises, the fire exposure increases due to flammables, including lubricants, oils, degreasers, and solvents. These must be properly labeled, stored, and separated from one another.
If welding is performed, tanks and gases must be handled properly. Welding must be separated from other operations by flash/welding curtains or performed in a separate room or building. Tires do not ignite quickly, but once ignited are difficult to extinguish and leave an oily smoke that permeates the entire area.
Inland marine exposures include accounts receivable if the taxi company offers credit, computers, and valuable papers and records for contracts with drivers. Also, driver logs may be required to meet federal, state, and municipal regulations. Computers and satellite tracking systems may be used to track vehicles and maintain contact with drivers. All data must be duplicated and stored off-site so it can be easily replicated in the event of a loss.
Crime exposures are from employee dishonesty, burglary, robbery, and money and securities. If drivers are independent contractors, the exposure is limited off-premises as they are responsible for arranging their own crime coverage. The exposure is high on premises as drivers return to the taxi company's premises to turn over money collected during their shifts.
Background and criminal history checks should be performed on all employees who handle money. There must be a separation of duties between persons handling orders, deposits and disbursements and reconciling bank statements. Outside audits should be conducted regularly.
Due to the potential for large amounts of cash to be on the premises, alarms and other security arrangements should be appropriate. The timing of bank deposits and routes taken should be staggered.
Commercial auto exposures are high. Taxi companies often own the vehicles and lease them to the drivers, but have limited control over them because they are independent contractors. However, the taxi company can require each driver to have a valid license appropriate for the type of vehicle driven, require satisfactory MVRs, prohibit the use of alcohol and drugs, and require successful completion of driving courses.
Drivers should be trained on how to respond in case of a medical emergency. Random testing for alcohol and drug use should be required. Seatbelts and child safety seats should be required when the vehicle is in motion. Vehicles must be properly maintained on a scheduled basis with records of such maintenance kept at a central location.
What Does Taxi Insurance Cover & Pay For?
There are several reasons why taxi companies or individual taxi drivers might be sued. Some common reasons include accidents, personal injury claims, property damage claims, and discrimination allegations.
In the case of an accident, a taxi driver or company may be sued for negligence if they were found to have caused the accident. Insurance can help protect taxi drivers and companies in these cases by providing coverage for damages or injuries resulting from the accident. Depending on the level of coverage purchased, insurance can help pay for legal fees, medical expenses, and property damage.
Similarly, personal injury claims may arise if a passenger or third party is injured while riding in a taxi. Insurance can help protect taxi drivers and companies by providing coverage for medical expenses and legal fees associated with the claim.
Property damage claims may arise if a taxi driver or company damages another person's property, such as a building or another vehicle, while operating their taxi. Insurance can help pay for the cost of repairs or replacement of the damaged property.
Finally, discrimination allegations may arise if a taxi driver or company is accused of refusing service to a passenger based on their race, ethnicity, gender, religion, or other protected characteristic. Insurance can help pay for legal fees associated with defending against these allegations.
Overall, insurance can provide important protections for taxi drivers and companies facing lawsuits. It can help pay for legal fees, damages, and other costs associated with defending against a lawsuit, which can help mitigate the financial impact of these claims.
Commercial Insurance And Business Industry Classification
- SIC CODE: 4121 Taxicabs
- NAICS CODE: 485310 Taxi Service
- Suggested Workers Compensation Code(s): 7370 Taxicab Co. - All Other Employees & Drivers, 8385 Automobile - Rental Co. - Garage Employees
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 41: Local And Suburban Transit And Interurban Highway Passenger Transportation | Industry Group 412: Taxicabs
4121 Taxicabs: Establishments primarily engaged in furnishing passenger transportation by automobiles not operated on regular schedules or between fixed terminals. Taxicab fleet owners and organizations are included, regardless of whether drivers are hired or rent their cabs or are otherwise compensated. Establishments primarily engaged in furnishing passenger transportation by automobile or bus, to, from, or between airports or rail terminals, over regular routes, are classified in Industry 4111. Taxicab associations and similar organizations which do not operate taxicabs, but supply maintenance and repair services to their members, are classified in Industry 4173.
- Taxicab operation
Taxi Insurance - The Bottom Line
To learn more about the exact types of taxi insurance policies you'll need and how much coverage you should carry, consult with a reputable agent that is experienced in business insurance.
Additional Resources For Commercial Auto Insurance
Learn about small business commercial auto insurance which includes liability and physical damage protection for vehicles that are used for business purposes.
- Insurance Automotive Terms Glossary
- Amazon Delivery Drivers
- Ambulance Services
- Big Rig Truck
- Bobtail Non-Trucking Liability
- Charter And Tour Bus
- Commercial Auto
- Commercial Auto Liability
- Commercial Electric Vehicle Insurance
- Commercial Van
- DoorDash, GrubHub & Uber Eats Drivers
- Dump Truck
- Food Truck
- Freight Forwarder
- Household Goods Moving
- Motor Truck Cargo
- Non-Owned And Hired Auto Liability
- Owner Operator
- Pizza Delivery
- Tow Truck
- Specialty Automobiles, Trucks And Recreational Vehicles
- Specialty Physical Damage
Commercial auto insurance is a type of insurance that provides coverage for vehicles used for business purposes. This includes vehicles such as delivery trucks, company cars, and other vehicles that are used to transport goods or employees.
Commercial auto insurance is necessary for businesses that rely on their vehicles to conduct their operations. It helps to protect the business from financial losses due to accidents, theft, or other unexpected events. It also helps to protect the business from potential lawsuits that may arise from accidents involving their vehicles.
There are several types of coverage options available under business auto insurance policies. These include:
- Liability coverage, which covers damages or injuries that you or your employees cause to others while operating a business vehicle.
- Physical damage coverage, which covers damages to your own vehicle, is also available.
- Other coverage options may include medical payments, uninsured or underinsured motorist coverage, and rental reimbursement.
It is important for businesses to carefully consider their commercial auto insurance needs and to choose a policy that offers the right level of coverage. This can help to ensure that the business is protected in the event of an accident or other unexpected event.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Motor Truck Cargo, Valuable Papers and Records, Employee Dishonesty, Money and Securities, General Liability, Employee Benefits, Umbrella, Motor Carriers Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Mobile Equipment, Signs, Warehouse Operators' Legal Liability, Cyber Liability, Employment-related Practices, Environmental Impairment, Underground Storage Tank, Stop Gap Liability and International Coverages.