INSURANCE GUIDE Hire and Reward Insurance - what delivery drivers and couriers need |
TL;DR
- Standard SDP (social, domestic and pleasure) motor insurance explicitly excludes driving for payment.
- Hire and reward (H&R) insurance - Class 3 use under the Road Traffic Act 1988 - is required for any paid delivery, courier, taxi, or private hire activity.
- Most delivery platform insurance covers only active delivery tasks and is third-party only. There is a significant gap in cover between deliveries and travelling to the delivery zone.
- PAYG H&R cover is available from specialist providers, activated per session, and is cost-effective for part-time gig workers doing fewer than 15 to 20 hours per week.
- Driving for hire and reward without H&R cover is a criminal offence under Road Traffic Act 1988 s.143, carrying an IN10 endorsement of 6 to 8 penalty points.
Last reviewed: June 2026
KEY FACTS | |
| What H&R covers | Carrying goods or passengers in exchange for payment where the payment is for the transport itself - Class 3 motor use |
| Who legally needs it | Food delivery drivers, couriers, parcel drivers, private hire drivers, taxi drivers - anyone paid to transport goods or passengers |
| Legal basis | Road Traffic Act 1988 s.143 requires insurance for the actual use being made of the vehicle |
| Platform cover gap | Active delivery tasks only; third-party only; inter-delivery gap not covered; travel to delivery zone not covered |
| PAYG providers | Specialist providers offer per-session activation layered over existing SDP policy |
| Annual cost indication | GBP 300 to GBP 800 per year for a standard delivery car; PAYG typically GBP 1 to GBP 3 per working hour |
What Is Hire and Reward Insurance?
Hire and reward (H&R) motor insurance, formally classified as Class 3 use under the Motor Vehicles (Compulsory Insurance) Regulations, covers using a motor vehicle to carry goods or passengers in exchange for payment where the payment is for the transport service itself. The legal basis is s.143 of the Road Traffic Act 1988, which requires motor insurance to cover the actual use being made of the vehicle - not just the use stated in the policy.
A standard SDP policy does not cover Class 3 use. The exclusion is explicit in virtually all standard motor policy wordings. If a delivery driver uses an SDP vehicle for delivery work and has an accident during that work, the insurer can avoid the claim and potentially void the policy for misrepresentation of use. The driver then faces personal liability for third-party claims, which for serious injury can run to hundreds of thousands of pounds or more.
KEY FACTS
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What Standard Insurance Does Not Cover
The exclusion of hire and reward from standard SDP policies is explicit, not a grey area. Activities not covered under a standard SDP policy include: delivering food for any platform or restaurant; delivering parcels as a self-employed courier; driving for a private hire vehicle (PHV) platform; operating as a licensed taxi driver; any other activity where the driver is paid to transport goods or passengers. Even driving a takeaway van owned by a restaurant while being paid for deliveries falls under this exclusion.
What Platform Insurance Actually Covers
Platform fleet cover is significantly more limited than most drivers realise. The typical scope:
- Active deliveries only: cover applies only when the driver has accepted and is actively completing a task in the platform app. Cover ceases when the delivery is marked complete.
- Third-party only: platform fleet policies are almost universally third-party only. They cover damage to others and third-party injury, not damage to the driver own vehicle.
- Inter-delivery gap not covered: the period between completing one delivery and accepting the next - when the driver is logged in and available but not on an active task - is not covered. This is a significant and frequently misunderstood gap.
- Travel to delivery zone not covered: the journey from home to the delivery area at the start of a shift is not covered by platform insurance.
The Inter-Delivery Gap
The inter-delivery gap is the period when a delivery driver is logged in and available on the platform app but is not on an active delivery. This includes: waiting for the next order after completing a delivery; driving to a restaurant area to position for orders; moving between delivery zones. During this period, platform insurance does not apply. The driver is on their personal SDP policy alone - which excludes hire and reward use. An H&R policy or PAYG H&R cover activated throughout the working session covers this gap entirely.
PAYG vs Annual H&R Policies
Annual H&R policy: A 12-month motor policy including Class 3 cover. Appropriate for full-time delivery workers. Can be third-party only, third-party fire and theft, or comprehensive. For drivers using their own vehicle, comprehensive is generally advisable.
PAYG H&R cover: Activated per working session via a smartphone app, layered over the existing SDP policy. When the driver logs on to a delivery session, H&R cover activates. When they log off, it deactivates. Billing is per minute or hour. Indicative rates: GBP 1 to GBP 3 per hour. For a driver working 10 hours per week, that is approximately GBP 520 to GBP 1,560 per year. An annual H&R policy for the same driver might cost GBP 400 to GBP 600, making annual cover more economical above approximately 15 to 20 working hours per week.
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Disclaimer: This guide is for general information only. Kael Tripton Ltd is not authorised or regulated by the FCA. Always verify details with an FCA-authorised insurer or broker before purchasing. |
Frequently Asked Questions
Does platform insurance cover me between deliveries?
No. Platform fleet insurance applies only during active, assigned delivery tasks. The inter-delivery gap - when logged in and available but not on a specific task - is not covered. A personal H&R policy or PAYG H&R cover active throughout the working session covers this gap.
What is the difference between Class 1, Class 2, and Class 3 motor use?
Class 1 (SDP) covers social, domestic, and pleasure use and may include commuting. Class 2 extends to business use including driving to multiple sites for employment (but not carrying goods for payment). Class 3 covers carrying goods or passengers for payment where the payment is for the transport itself. Food delivery, courier work, taxi, and private hire all require Class 3 cover.
Is Amazon Flex driving covered by Amazon insurance?
Amazon Flex provides third-party liability cover for drivers during active delivery blocks. It is third-party only and covers only active delivery time. The inter-delivery gap, travel to the collection point, and damage to the driver own vehicle are not covered. Amazon Flex drivers need their own H&R policy for full protection.
Can I use my personal car for food delivery without telling my insurer?
No. Using a personal vehicle for delivery without H&R cover and without telling the insurer is a breach of policy terms and the Road Traffic Act 1988. If the insurer discovers the vehicle was used for hire and reward - for example following an accident - they can void the policy and refuse any claim.
What happens to my no-claims bonus if I switch to an H&R policy?
No-claims discount (NCD) earned on a standard SDP policy can typically be used when taking out an H&R policy, as most H&R insurers recognise standard motor NCD. NCD earned on a fleet policy (such as a platform fleet policy) does not transfer to a personal policy. Confirm with the specific insurer when obtaining quotes.
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