Taxi insurance is a form of liability coverage that is needed for a taxi company to protect their business. Driving is one of the most dangerous hazards, with over 5.8 million auto accidents last year resulting in 2.3 million people injured. Operating in this high risk industry, taxi insurance provides a safety net in case an accident or some other unfortunate incident happens.
The Facts
Taxi insurance is designed to protect the company, its drivers and its assets by providing coverage against liability. This type of insurance is much more expensive than private car insurance due to the possibility of covering multiple passengers and the taxis exposure to risk by being on the road longer than private cars. A comprehensive policy covers incidents such as vandalism, theft, fire and other damages caused by the accident no matter who is at fault. Taxi insurance usually includes clauses such as Business Interruption Policy which pays the taxi company while they are unable to conduct business.
Requirements
To have taxi insurance, a company must meet certain requirements before being considered for coverage. In general, taxis must operate as fare-based and keep regular maintenance and inspections. Drivers will be unable to get coverage if they have been convicted of vehicle manslaughter, possession of a weapon and all alcohol, drug and narcotic incidents. Drivers who are under the age of 25 and over 65 or posses physical impairments will be excluded. There is an exception for drivers over 65 who pass a medical examination. Other requirements would be for drivers to have more than two years' driving experience in the United States, have fewer than seven total points with fewer than five in a twelve month period. Most important, the driver must possess a valid driver's license.
Benefits
Having taxi insurance gives taxi companies peace of mind while providing service to their customers.
If an accident occurs while conducting business which causes damage to the taxi or other property and/or injuries, their insurance company would be responsible for paying the award amount up to the coverage limit if they are found liable. The insurance company would conduct an independent, thorough investigation which would eliminate unjust claims. The policy also covers the legal costs of the insured during a lawsuit.
Considerations
An insurance company's responsibility is to make sure the taxi company applying for coverage is not a high risk undertaking. Insurance companies analyze several factors such as risk, history of claim activity and coverage amount before determining whether to offer a premium payment or not, and how much it will be. In return, the taxi company agrees to pay the premium amount specified by the insurance company to become insured.
Misconceptions
Having auto insurance isn't the same as taxi insurance. However, auto insurance is required to have under a taxi liability policy. If an accident or a lawsuit of negligence is brought upon a taxi business, the auto insurance will not cover liability on the business, but only the accident. Operating a business without liability and just auto insurance will leave you vulnerable to lawsuits, tremendous award amounts and being subject to the laws of the state you operate in.
