Understanding Hire and Reward Insurance for Couriers

If you deliver food by car, moped or motorcycle in the UK, you will hear the phrase hire and reward insurance very often. Many new couriers are not sure what it means, or whether their normal policy is enough.

This article explains the key ideas in plain English. It is general information only. JZ Consultant Group is not an FCA-authorised insurance broker. We do not recommend, sell or arrange insurance policies. Always get quotes and advice from an FCA-authorised insurer or broker.

Why insurance matters so much

In the UK, it is a legal requirement to have at least third-party motor insurance to use a motor vehicle on a public road. The policy must also cover the way you are using the vehicle.

This last point is important. You might have a valid insurance policy, but if you use the vehicle for something the policy does not include, you may not be covered. Driving or riding without suitable insurance is an offence. It can lead to penalties, points on your licence and the vehicle being seized. If there is an accident, you could also be personally responsible for the costs.

The different types of use

Motor insurance policies are usually built around a "class of use". Common types include:

• Social, domestic and pleasure (SD&P): everyday personal use, such as shopping, visiting friends and going on holiday.
• Commuting: travelling to and from one regular place of work.
• Business use: using the vehicle as part of your work, for example travelling between different sites. This normally does not include carrying goods or people for payment.
• Hire and reward: carrying goods or passengers in return for payment. Food delivery generally falls into this category.

A standard SD&P or commuting policy will usually not cover you while you deliver food. Even "business use" is often not enough. You normally need a policy that clearly states it covers food delivery or hire and reward.

What "food delivery insurance" means

Some insurers offer policies designed for takeaway and grocery delivery. These may be called food delivery insurance, fast food delivery cover or courier insurance. They usually include hire and reward use for delivering food.

Be careful with the wording. Cover for food delivery may be different from cover for parcel delivery or multi-drop courier work. If you plan to do both, check that your policy covers both kinds of work. If in doubt, ask the insurer or broker in writing.

Ways to pay for cover

Couriers may come across different ways to arrange cover. Common options include:

• Annual policies that include hire and reward or food delivery use all the time.
• Top-up or add-on cover that sits alongside an existing personal policy and covers you while you are working.
• Pay-as-you-go or hourly cover, where you are charged for the time you are logged in or actively delivering.

Each option has advantages and disadvantages. Some couriers prefer the simplicity of one annual policy. Others who work only a few hours a week look at pay-as-you-go options. What suits you depends on your vehicle, how often you work, your driving history and your budget. We cannot tell you which is best. An FCA-authorised broker or insurer can explain the options for your situation.

Telling your insurer the truth

When you buy any policy, answer every question honestly. Tell the insurer:

• That you deliver food, and which platforms you use
• Who will use the vehicle
• Where the vehicle is kept overnight
• Any modifications to the vehicle
• Any previous claims or motoring convictions

If you give wrong information, or leave things out, the insurer may refuse to pay a claim or cancel your policy. Cancellation can make future insurance harder and more expensive to get.

If your situation changes, for example you start delivering or change vehicle, contact your insurer straight away.

What about bicycles and e-bikes?

Normal pedal bicycles do not legally require motor insurance. E-bikes that meet the UK rules for electrically assisted pedal cycles (EAPC) are generally treated in the same way. E-bikes or e-scooters that do not meet these rules may be treated as motor vehicles, with very different legal requirements.

Even if motor insurance is not required by law, some platforms may ask cyclists to have certain cover, or may provide some cover while you are working. You may also wish to think about public liability or personal accident cover. Check the platform's official information and speak to an authorised provider.

Checking who you are dealing with

Before you buy insurance, check that the firm is authorised. You can search the FCA Register (opens in a new tab) to see whether an insurer or broker is authorised by the Financial Conduct Authority. Be very careful with anyone selling cheap "courier insurance" through social media or messaging apps. Fake insurance, sometimes called "ghost broking", is a real risk.

How JZ Consultant Group can help

We can explain insurance terms in plain language and help you understand what platforms commonly ask to see, so that you can have a clear conversation with an authorised provider. We do not recommend or arrange policies.

Read more about our delivery insurance guidance, see our article on food delivery insurance for cars and motorcycles, or send us a request.

This article is general information only and is not insurance advice. JZ Consultant Group is not an FCA-authorised broker and is not affiliated with any delivery platform. Always obtain quotes from FCA-authorised firms and check the platform's official guidance.