Private hire insurance in Scotland: what the rules actually ask for

What the law requires

There are two separate legal hooks: one on anyone using a vehicle, and one on the council that licenses it.

The Road Traffic Act. Section 143 of the Road Traffic Act 1988 says you must not use a motor vehicle on a road or public place without a policy that meets the Act's requirements, and that doing so is an offence. GOV.UK gives third party insurance as the legal minimum.

The licensing law. Section 10(2) of the Civic Government (Scotland) Act 1982 says a licensing authority can't grant or renew a taxi or private hire car licence unless it's satisfied there's a suitable insurance policy in force for the vehicle. That's why insurance comes up at car licence renewal.

Hire and reward: the part ordinary car insurance won't do

Carrying paying passengers is what's called hire and reward. Dundee's council page uses the phrase when it explains that you need a private hire car operator's licence if you drive a vehicle with eight or fewer passengers for hire or reward. Zego, an insurer that sells this cover, describes passenger liability as part of hire and reward motor insurance, covering passengers while they're travelling. Check that your certificate says it covers this use, because a policy that doesn't may not satisfy either law above.

Public liability: not a legal requirement, but check your council

The same Zego guide (last updated 3 August 2026) says public liability isn't a legal requirement, that it's usually sold as an optional add-on, and that some councils set minimum conditions for private hire licences while others leave it to the driver. It covers things your motor policy may not, such as a passenger tripping over luggage during loading. Bear in mind that's a firm with a product to sell, and it doesn't say anything specific to Scotland.

So your own council's conditions are the thing to read. Of the two sets of Scottish conditions read for this page, neither sets a public liability figure: Edinburgh's don't mention it, and Dundee's private hire driver conditions don't mention insurance at all. That's only those two documents. It tells you nothing about other councils, or about Dundee's separate operator conditions.

Employers' liability is a different thing. GOV.UK says you must have it, for at least £5 million, as soon as you employ someone, and you can be fined £2,500 for every day you aren't properly insured. There's an exemption if you only employ certain close family members. If you're self-employed and on your own, read that page rather than assuming either way.

What Edinburgh's conditions ask of you day to day

As one example of how a council turns this into daily rules, Edinburgh's licensing conditions say:

• The licence holder must hold a valid certificate of insurance in their own name and produce it to an authorised officer, cab inspector or constable on request.
• A valid certificate or cover note showing cover for all drivers must be carried in the vehicle at all times, available for a passenger, officer or constable to inspect.
• The driver must check, before each shift, that a certificate or cover note confirming they're insured to drive that vehicle is in it.

Those conditions were approved in November 2016, and the council lists later amended sets, so check which version applies to your licence on its driver licence page.

What drives the price

There's no official price list, and no council page read for this guide gives premiums. One insurer's guide (published 2 October 2026) names these things as affecting what you pay:

• Level of cover: it says third party only costs less than fully comprehensive.
• Policy length: it offers 30 days or a year.
• Telematics: its own policy scores how smoothly you drive, and that feeds into the renewal price.
• Extras such as breakdown cover, a replacement car and no claims protection.

For public liability, the same insurer lists business type and size, location, claims history and level of cover. Those lists describe its own products, and other insurers may price differently. No independent, Scotland-specific source for premiums was found, so this page doesn't quote any.

What to check before you buy or renew

• Does the certificate say private hire or hire and reward? Read the certificate itself, not the sales page.
• Whose name is it in? Edinburgh's conditions, for one, want it in the licence holder's own name. Check your own council's.
• Does your council set a public liability condition? Read your conditions, and if they're silent, ask licensing.
• Does the insurer's cover run during loading and unloading? The Zego guide names this as something to confirm.
• Is the firm authorised? The FCA's Financial Services Register (page last updated 13 February 2026) is a public record of authorised firms, and it also lists scams and clone firms. Check there before you pay anyone.
• Does the cover run past your licence renewal? Councils can ask for it at renewal, so don't let it lapse just before. See the Glasgow renewal checklist for one example, and licence costs by council for the fees alongside it.

Sources

• Road Traffic Act 1988, section 143 — legislation.gov.uk (read 1 November 2026)
• Civic Government (Scotland) Act 1982, section 10 — legislation.gov.uk (read 1 November 2026)
• Vehicle insurance — GOV.UK (read 1 November 2026)
• Employers' liability insurance — GOV.UK (read 1 November 2026)
• Licensing conditions for taxis and private hire cars — City of Edinburgh Council (approved 21 November 2016, read 1 November 2026)
• Private hire driver licence conditions — Dundee City Council (undated, read 1 November 2026)
• Taxis and Private Hire Cars — Dundee City Council (read 1 November 2026)
• Financial Services Register — FCA (last updated 13 February 2026)
• Is public liability insurance included in private hire insurance? — Zego, an insurer (last updated 3 August 2026)
• Private hire insurance outside London — Zego, an insurer (published 2 October 2026)