Livery Insurance: Coverage, Cost & Requirements

What Is Livery Insurance?

Livery insurance is a type of commercial auto insurance designed for businesses that transport passengers for a fee. It helps protect transportation businesses, their vehicles, their drivers, and their passengers while conducting passenger-for-hire operations. Livery insurance is commonly used by limousine and chauffeur companies, black car services, airport transportation providers, executive transportation companies, taxis, and Uber Black drivers.

Most personal auto insurance policies are not designed to cover passenger-for-hire activities. As a result, businesses that transport people for compensation typically need specialized commercial coverage that reflects the increased risk associated with carrying paying passengers.

Whether you operate a single luxury sedan for Uber Black or manage a fleet of executive transportation vehicles, having the proper insurance coverage is an important part of protecting your business and remaining compliant with applicable requirements.

Who Needs Livery Insurance?

Generally speaking, if you transport passengers for compensation, you may need livery insurance.

Uber Black Drivers

Uber’s website states that they require drivers participating in Uber Black to maintain commercial auto insurance. Personal auto insurance does not satisfy Uber Black's commercial insurance requirements. Drivers may also need additional permits or licenses depending on their location.

Black Car Services

Black car services typically provide prearranged transportation using luxury sedans, SUVs, or executive vehicles. Because these businesses transport paying passengers, they often require specialized commercial auto insurance coverage.

Chauffeur Businesses

Chauffeurs provide professional transportation services for business travelers, executives, tourists, special events, and personal transportation needs. The unique nature of chauffeur services often requires insurance designed specifically for passenger transportation operations.

Limousine Companies

Limousine businesses face unique exposures due to the potential to transport large numbers of passengers, higher vehicle values, and specialized vehicle use. Livery insurance can help address those risks.

Airport Transportation Providers

Businesses that transport passengers to and from airports can be categorized as for-hire transportation services by state and local governments. Because airport transportation businesses are often paid to transport passengers, many operators obtain commercial insurance designed for passenger transportation services.

Executive Transportation Providers

Executive transportation operators frequently transport corporate clients, executives, and VIP passengers using premium vehicles and may require insurance designed for these higher-end transportation operations.

What is a Livery Vehicle?

A livery vehicle is a vehicle used to transport passengers for compensation. Common examples include Uber Black vehicles, black car services, chauffeur vehicles, limousines, executive transportation vehicles, airport transportation vehicles, and other for-hire passenger vehicles.

Examples of Livery Vehicles

• Luxury sedans
• Luxury SUVs
• Limousines
• Sprinter vans
• Airport transportation vans

What Does Livery Insurance Cover?

The specific coverages available may vary by insurer, state, and business type, but livery insurance policies often include several important coverages.

Auto Liability Coverage

Auto liability coverage helps protect your business if you are responsible for bodily injury or property damage resulting from an accident.

For example, if one of your vehicles is involved in an accident that injures another driver or paying passengers in your vehicle, or damages another vehicle, liability coverage may help pay covered expenses.

For many transportation businesses, liability coverage forms the foundation of a livery insurance policy.

Physical Damage Coverage

Physical damage coverage helps protect your insured vehicle.

This coverage often includes:

• Collision coverage: may help pay for repairs following a covered accident.
• Comprehensive coverage: may help protect against losses caused by events such as:
  • Theft
  • Vandalism
  • Fire
  • Hail
  • Falling objects

Uninsured Motorist Coverage

If another driver causes an accident but does not carry insurance, uninsured motorist coverage may help protect covered parties.

Underinsured Motorist Coverage

If the at-fault driver's insurance limits are not sufficient to cover damages, underinsured motorist coverage may help fill the gap.

Medical Payments Coverage

Medical payments coverage may help pay covered medical expenses resulting from an accident, regardless of fault.

Hired and Non-Owned Auto Coverage

Some transportation businesses use vehicles they do not own outright.

Hired and non-owned auto coverage may help protect businesses that occasionally use rented, leased, or employee-owned vehicles for business purposes.

Additional Optional Coverages

Depending on the insurer and operation, transportation businesses may also consider:

• Higher liability limits
• General liability insurance
• Commercial umbrella insurance
• Property insurance
• Workers' compensation insurance

The appropriate mix of coverages depends on the unique needs of each business. See our Coverages We Offer page for a full list of commercial auto insurance coverages available through Milepost. 

Livery Insurance vs Personal Auto Insurance

One of the most common misconceptions about passenger transportation business is that personal auto insurance will cover passenger-for-hire activities.

In most situations, personal auto insurance is designed for personal transportation, not commercial passenger transportation. As a result, personal auto insurance will generally exclude coverage for claims arising from transporting paying passengers.

If you earn income by transporting passengers, it is important to verify that your insurance coverage aligns with your business activities. If you are relying on personal insurance to cover a passenger transportation business, you may be exposed to significant financial losses if a claim falls outside your policy's coverage.

Does Uber Black Require Livery Insurance?

Uber states that drivers participating in Uber Black must maintain commercial auto insurance. Personal auto insurance does not qualify for Uber Black operations. Many Uber Black operators obtain livery insurance because they transport paying passengers as part of a commercial transportation business. Drivers may also be required to maintain permits or licenses required by their local jurisdiction.

The exact insurance requirements may vary depending on:

• State regulations
• Local regulations
• Vehicle type
• Business structure

For many operators, livery insurance serves as an important component of meeting commercial insurance requirements associated with passenger transportation services.

Example: Single-Vehicle Uber Black Operator

Consider a transportation business owner who operates a single luxury sedan on Uber Black.

Although the business only owns one vehicle, the driver is still transporting passengers for compensation. As a result, specialized commercial insurance may be required.

This is an important point because many new operators incorrectly assume that only larger fleets need livery insurance.

How Much Does Livery Insurance Cost?

This is a common question among passenger transportation business owners. The answer depends on several factors.

Location

Insurance costs often vary significantly between states, cities, and geographic regions.

Areas with higher traffic density, larger populations, or more claims activity may experience different insurance costs than less densely populated areas.

Driving History

Driver records can have a significant impact on pricing.

Insurers often evaluate factors such as:

• Accidents
• Violations
• Claims history
• Years of driving experience

Vehicle Type

A luxury SUV, limousine, executive sedan, and passenger van all present different risk profiles.

Vehicle characteristics can influence insurance costs.

Vehicle Value

More expensive vehicles may cost more to repair or replace, which can influence premium calculations.

Number of Vehicles

A business operating one vehicle may be evaluated differently than a business operating a larger fleet.

Coverage Limits

Higher coverage limits generally provide greater protection but may also increase premiums.

Claims History

Past claims may affect future insurance costs.

Business Operations

Insurers often consider:

• Number of passengers transported
• Geographic operating area
• Hours of operation
• Type of transportation services provided

Why Two Livery Businesses May Pay Different Premiums

Example 1: Uber Black Owner-Operator

A single-vehicle Uber Black operator driving a luxury sedan may have very different insurance costs than a larger transportation company.

Example 2: Limousine Business

A limousine company operating multiple vehicles and employing several drivers may present different risks and coverage needs.

Example 3: Executive Transportation Fleet

An executive transportation company managing multiple high-value luxury vehicles may require different coverage structures and limits.

Livery Insurance Requirements

Livery insurance requirements vary based on numerous factors, including:

• State laws
• Local laws
• Regulatory agencies
• Vehicle classifications
• Business activities

Here are a few examples of requirements for livery businesses beyond just commercial auto insurance:

• Commercial registration
• Transportation licenses
• Operating permits
• Minimum insurance limits

Requirements can differ substantially between jurisdictions, so business owners should verify applicable requirements before beginning operations.

Why Passenger Transportation Businesses Choose Milepost

Milepost Insurance helps small passenger transportation businesses obtain commercial auto insurance designed for how they actually operate.

Many of our customers are:

• Owner-operators
• Single-vehicle businesses
• Small fleets

We understand the unique needs of small passenger transportation businesses and strive to make insurance simple.

Transportation business owners choose Milepost because of:

• Fast online quotes
• Competitive options for small operators
• Flexible payment plans
• Online policy management
• Transportation insurance expertise
• Highly responsive customer service for all policyholders
• Insurance markets that are wholly-owned subsidiaries of Berkshire Hathaway

Whether you operate one vehicle or a growing fleet, our team can help you explore coverage options that fit your operation.