Is Taxi Insurance Really Worth the Money?

Whether you own just one taxi cab or a fleet of vehicles for hire, your state most likely requires you to have taxi insurance. At first glance, this may feel like an extra obstacle to making money with your small business, but taxi insurance is an important investment, and you should never operate hired passenger vehicles without it. 

You probably know how common lawsuits against small businesses can be. With the safety risks that driving entails, this risk is compounded, and it's important to take the right steps in case something goes wrong. Remember these basic points.

1. Auto Insurance Is Not Taxi Insurance

While you must have a commercial auto policy for cars you use for business, your policy won't cover hired passenger vehicles. 

Owners of taxis, minibuses, black cars, and shuttle vans need a separate insurance policy on top of commercial auto to cover claims made against their business as a whole. If one of your drivers is in an accident and a passenger's property is stolen or damaged, taxi insurance will cover that. You can also get business interruption insurance, which will cover times in which a driver cannot operate a damaged taxi.

2. Drivers Aren't Perfect

Many taxi businesses thrive in congested urban areas with a lot of traffic, or your drivers can find themselves in all kinds of unfavorable weather conditions. No matter how responsible you or the drivers you hire are, accidents happen all the time, and a taxi cab is a precarious environment. 

You never know what kind of passengers you might find yourself doing business with. On the flip side, imagine you hired one disgruntled employee who committed theft. There's no reason to jeopardize your company's money and reputation by not being protected.

3. Not All Policies Are Created Equal

You can save money on taxi insurance by researching the minimum requirements in your state. Cars that only transport two or three people at most won't be paying as much as heavier vehicles that can transport many passengers. Some states also give you the option of self-insurance, where a cash deposit or the purchase of a bond will take the place of a more traditional taxi insurance policy. You could have way more options than you think.

The bottom line is that taxi companies always make money. It's a much-needed service no matter where you live. Protect yourself, your workers, and your cars by finding the right taxi insurance policy. You never know when it's going to make a difference to your future.