An Insurance question that opened a can of worms

We were set what seemed a simple task to answer a question, but instead we uncovered the dangers of hiring the wrong chauffeur company


The question we were set was: what are the insurance implications when hiring an illegal chauffeur, limousine or novelty vehicle in UK?

To answer that question we ended up contacting the police, the DVLA, UK insurers, council licensing departments from Lands End to John O’Groats, along with trade associations, publications and chauffeur companies. We received two types of responses. On one hand we were passed around the houses, including being told we would have to use freedom of information requests to get the information we required, whilst on the other-hand the chauffeur industry welcomed our investigation and said it was about time the dangers of illegal chauffeurs were highlighted to the public and businesses.

Two of the UK trade associations, the National Private Hire Association (NPHA) and The National Limousine and Chauffeur Association (NLCA) told us that the industry was waiting for a tragedy to happen before rogue firms and individuals were run out of business.

Our research has uncovered firms ignoring the law, bending it to breaking point, or claim to be in the dark that the service they are offering should be regulated under the Local Government (Miscellaneous Provisions) Act 1976 (England) – The Town Police Clauses Act 1847 is also used by some councils in England – or in Scotland, The Civic Government (Scotland) Act 1982.

These laws and regulations are there for a reason. Like all types of licenses they ensure only the right type of person can fly a commercial plane, drive a HGV, own a gun or be a landlord of your local pub. Can you imagine a world where anybody would be comfortable flying away on holiday on a plane where the airline has found a “loophole” or licensing weak-point to avoid regulation?

Unfortunately, in the UK there are far too many firms and individuals who know they are out-right breaking the law. Others break the law by using genuine exemptions, deliberately knowing that the services they offer breach these strict restrictions. And finally you have the chauffeurs and firms who purposely set-out to find inventive systems to circumnavigate the law, which can include complex business structures.

Who regulates the chauffeur, limousine and novelty vehicle industry?

The Department for Transport (DfT) has clear guidelines for what type of business or service should be regulated under private hire legislation. Private Hire legislation covers vehicles up to eight passenger seats, plus an addition seat for the driver. Nine passenger seats and above are covered by public service vehicle (PSV) regulation.

The DfT told us that any of the following would require the company or individual to hold a private hire operator’s licence, vehicle licence and driver licence:

  • A commercial benefit on part of the driver / organisation providing the service
  • Carrying passengers being the main part of service
  • Drivers duties restricted to driving and assisting with luggage
  • A service in which Parliament had in mind when passing legislation
  • Event management companies who provide vehicles

The 350+ councils across the UK – including The Public Carriage Office in London – then have the responsibility to enforce the regulation and ensure that vehicles are licensed accordingly. When we raised with the DfT the issue of the insurance implications of illegal chauffeurs, limousines and novelty vehicles on UK roads, we were told this would be the responsibility of the police as it would be an insurance matter – or lack of – which the police have the powers to deal with.

When a person wants to setup a chauffeur company the current rules require the operator, driver(s) and vehicle(s) be subjected to various checks. This is where it gets complicated as every council across the UK have their own interpretation of the law.

Thankfully all councils require an operator, driver and vehicle to have the following checks:

  • A criminal record check (CRB) on the applicant(s) applying for a private hire operator’s licence
  • CRB checks for any driver, advanced CRB if children will be transported
  • Full medical set by councils which must be undertaken by the applicants (drivers) own GP
  • Council set written test to ensure applicants know the laws that regulate them along with knowledge tests
  • A special MOT set by the council, even if the vehicle is brand new
  • Various interim MOT’s within a 12 month period for vehicles over a certain age

These checks are paramount to ensure that the council in question has taken all steps under its ‘duty of care’ to make sure that the public is being transported in safe vehicles by drivers who don’t pose a risk to passengers.

The law can be an ass but it does raise the question; if an individual or company chooses to avoid these checks and regulations what have they got to hide?

If you choose to opt for the legal route you will be regulated by the council where you take the bookings. The council has the power to question you under caution and record any interviews. If the situation is serious enough a driver or operator can be brought before a panel which could result in a caution, suspension or termination of any licenses they hold with the council.

The problem though is if you choose to go down the illegal route councils have very little to no powers. A licence to operate, drivers private hire or vehicle licence cannot be revoked if they don’t have one. With an illegal firm the public have no place to make an official complaint if a vehicle is suspected to be unfit for the road, or if the driver makes unwanted sexual conversations to a lone female passenger. The only option consumers have in either of these situations is to report any concerns to the police.

But both the police and councils have a trick up their sleeve though which should send a message to both consumers and illegal operators.

What are the insurance implications if you hire an illegal chauffeur, limousine or novelty vehicle? contacted all UK insurers to ask the above question, but sadly only one insurer replied. Aviva confirmed the following:

The Plating / Licencing of vehicles to carry passengers for hire and reward is at the discretion of each local authority. Most local authorities do choose to plate/licence vehicles but some don’t.

Aviva’s position is that the certificate of insurance for our Taxi products carry a driving entitlement provision of :-

  • Provided that the person driving holds a licence issued by the DVLA to drive the vehicle or has held and is not disqualified from holding or obtaining such a licence and holds any other driving licence required by law to drive the vehicle for the purpose for which it is being used.


So this means that if the local authority require the vehicle to be plated to carry passengers and it isn’t then the insurance will be invalid but if they don’t then cover will apply.

Ever since The Serious Organised Crime and Police Act 2005 added sections 165A and 165B, the police have had the power to seize motor vehicles on UK roads which are driven by unlicensed drivers or when the vehicle has no insurance.

All UK associations which cover chauffeur, private hire and hackney matters all confirmed what Aviva had said is true. If the vehicle being used for ‘hire and reward’ is not licensed as required by law the vehicles’ insurance is void. This would also extend to a licensed private hire vehicle and driver picking up passengers off the street (illegally plying for hire) – like a black cab – with no prior booking.

We asked the Police and the Association of Chief Police Officers (APCO) if they were proactive in tackling the issue of illegal chauffeurs, limousines and novelty vehicles on UK roads with the current powers available to them, especially as these vehicles would have no insurance?

We still await a reply from APCO months after our email was read, but the police as a whole have been more proactive. The police do have special divisions across police forces which stop HGV’s, limos and other vehicles they deem may not be safe or are being driven illegally. They work in partnership with other government bodies, including DVSA, previously known as VOSA.

Transport for London (TfL) runs operation Kansas throughout the year. Operation Kansas is a joint initiative between TfL, the Driver Vehicle Standards Agency (DVSA), the TfL-funded Metropolitan Police Services, Safer Transport Command (STC) and City of London Police. Together they educate and enforce against unsafe and non-compliant limousines and novelty vehicles in London.

Between March 2012 and May 2013 a staggering 324 offences were committed on 380 vehicles stopped and investigated by operation Kansas. This resulted in 27 unsafe vehicles being removed from the road, 242 prohibitions being issued for road worthiness or driver related concerns and 58 Fixed Penalty Notices being issued for road traffic offences.

London should be applauded for taking such a proactive approach. This approach has resulted in the number of vehicles being stopped and investigated committing offences falling with the last limo operations just before Christmas 2013, all vehicles were found to be compliant which can only be a positive for consumers using these vehicles in London.

During our research it became clear that it’s not just a few isolated individuals and companies playing Russian roulette with the public’s lives, but a much bigger problem, one which in part is due to big businesses in the UK funding these illegal operator’s by enabling them to win large chauffeur contacts.

It is because of the information we have come across that has led us to carry out a full investigation into the UK chauffeur industry and the councils who should be taking enforcement action against rogue operators, vehicles and chauffeurs.


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