7 Taxi Insurance Requirements You Need in Australia

Securing the right taxi insurance isn’t just a regulatory box-tick—it’s the foundation for running a safe and sustainable taxi business in Australia. Whether you’re operating a single cab or managing a fleet, understanding what’s required by law and what’s simply good sense is essential for protecting your livelihood, your passengers, and the public. Insurance obligations for taxi operators span beyond basic vehicle cover; they’re shaped by a unique blend of legal mandates, financial prudence, and the realities of daily road risks.

While each state and territory applies its own set of rules and minimum coverage levels, there are seven essential insurance requirements every taxi operator should be across. These range from compulsory injury cover and comprehensive motor protection to public liability, workers compensation, and strict compliance with regulator-approved insurers. Overlooking any of these can leave you exposed to fines, uncovered claims, or even business closure.

This guide breaks down those seven core insurance requirements, highlighting the must-haves, the pitfalls to avoid, and the steps to ensure your cover is both compliant and cost-effective. If you’re ready to clarify your obligations and gain confidence in your coverage, read on for a practical, state-aware checklist every Australian taxi operator needs.

1. Compulsory Third Party (CTP) Insurance: Mandatory Personal Injury Cover

Every registered taxi in Australia must carry Compulsory Third Party (CTP) insurance. In some states it’s referred to as a “green slip” (NSW), but wherever you operate, this cover is non-negotiable. Its sole purpose is to protect people—drivers, passengers, pedestrians or other road users—if they suffer injury in an accident involving your taxi. Unlike other policies, CTP does not cover damage to vehicles or property; it’s purely about personal injury.

Though the core function of CTP is consistent nationwide, premiums and policy features can vary significantly between states and territories. Some jurisdictions use pay-as-you-drive models, while others charge flat fees based on vehicle type and usage. Staying on top of these differences ensures you meet legal requirements and avoid on-road penalties.

What CTP Insurance Covers

CTP insurance is designed to cover:

Medical and rehabilitation costs for any injured party
Legal expenses arising from injury claims
Loss of income or support if the injured person cannot work

Who is covered:

The taxi driver
Passengers in the taxi
Pedestrians and cyclists involved in an incident
Other third parties injured by your taxi

What’s not covered:

Damage to your taxi or other vehicles
Loss or damage to property
Theft, fire or vandalism

State-by-State Premiums and Guidelines

Premiums for CTP can differ widely:

NSW taxis: an upfront annual premium of around $4,993, according to Cabsure
Victoria, Queensland and other states set rates based on driving history, vehicle class and kilometres travelled
Some territories allow adjustments mid-year if your taxi’s usage changes

For detailed pricing methodology, payment options and reporting requirements, refer to the SIRA NSW CTP for Taxi Owners guidelines.

How to Purchase and Pay for CTP Insurance

Compare quotes online: enter your vehicle details and estimated annual kilometres on insurer websites or comparison portals.
Choose your payment plan:
- Lump sum annual payment for a fixed premium
- Instalment plan with regular data reporting (e.g. monthly odometer readings)
Check refund conditions: if you sell your taxi or usage drops significantly, you may be eligible for a prorated refund.
Complete registration: provide your insurer’s confirmation to the transport authority when renewing your taxi registration.

By shopping around and understanding each state’s model, you can keep this essential cover both compliant and cost-effective.

2. Comprehensive Motor Vehicle Insurance: Protecting Your Taxi

Comprehensive cover isn’t a legal must for taxis, but it’s a smart investment. While CTP only picks up injury costs, comprehensive policies step in to fix or replace your taxi after collisions, theft, fire, vandalism or natural disasters. On top of that, they pay for third-party property damage you cause. For a vehicle that’s on the road most of the day, every day, this level of protection helps keep you moving and your balance sheet in order.

Coverage Scope and Benefits

Comprehensive insurance typically includes:

Collision repairs: damage from crashes, whether you’re at fault or not
Fire and theft: repair or replacement if your taxi is stolen or catches fire
Vandalism: cover for malicious damage to windows, bodywork or interiors
Natural disasters: hail, flood, storm or other acts of nature
Third-party property damage: costs to repair another vehicle, a fence or building you hit

Beyond these core benefits, many insurers offer extras such as:

Choice of repairer: use a preferred panel shop or select your own
Replacement vehicles: get a temporary hire car while yours is off the road
Agreed-value cover: lock in a fixed sum insured, avoiding disputes after a total loss

Exclusions and Policy Limits

Most comprehensive policies will not cover:

Routine wear and tear or mechanical failure
Unauthorised drivers or those without a valid licence
Modifications not declared at the time of application
Intentional damage or racing events

When comparing policies, pay attention to:

Policy limits: the maximum amount payable per claim or per year
Excess options: higher voluntary excess can reduce your premium but increases out-of-pocket costs after a claim
Sub-limits for specific items, such as audio equipment or windscreen repairs

Reading the Product Disclosure Statement (PDS) closely will help you understand these limits before you commit.

Choosing the Right Comprehensive Policy

To find the best fit:

New-for-old vs market value: new-for-old replacement suits newer taxis, whereas market value may be more affordable for older vehicles
Optional extras: consider roadside assistance, windscreen cover or hire car inclusion
Discounts: insurers often reward low claims history or fleet packaging discounts

For a deeper dive into motor insurance essentials, see our motor insurance guide on National Cover.

3. Third Party Property Damage Insurance: Safeguarding Others’ Assets

Third Party Property Damage (TPPD) insurance is the bare-minimum cover you should consider if you want to protect other people’s assets when your taxi is on the road. Unlike comprehensive policies, TPPD steps in only when you damage someone else’s vehicle, fence, building or other property – it won’t touch repair bills for your own cab. For operators balancing cost against cover, this policy can keep you legal and financially protected in the event of an at-fault collision.

What’s Included and Excluded

TPPD typically covers:

Damage to other vehicles involved in an accident you cause
Repair costs for fences, gates, mailboxes or walls you hit
Structural damage to buildings, driveways or roadside fixtures

What it won’t cover:

Any damage to your taxi – you’ll pay for your own repairs
Theft, fire or vandalism of your vehicle
Passenger injuries or your personal liability

Understanding these limits is crucial: while TPPD shields you from the burden of third-party repair bills, it leaves your own cab fully exposed.

When Third Party Is Sufficient

For some operators, TPPD delivers the right balance of compliance and affordability:

Older taxis with lower market value, where repair costs are minimal
Part-time drivers logging limited kilometres each week
Businesses on a tight budget needing legal cover without the extras

In many cases, annual TPPD premiums can run as little as one-third of comprehensive cover for the same vehicle. If you’re running a modest operation and can stomach repair costs yourself, third-party may do the job.

Upgrading from Third Party to Comprehensive

There are a few clear signals it’s time to step up to comprehensive cover:

Accident history: multiple at-fault incidents will push repair bills beyond what you can comfortably fund
High-value vehicles: newer taxis or luxury models carry hefty replacement costs
Business growth: adding more cars or drivers makes financial exposure multiply

Here’s a simple cost-benefit snapshot:

Policy Type	Annual Premium¹	What’s Covered
Third Party Property	~$500 (varies by state)	Unlimited liability for third-party property damage; own-vehicle not covered
Comprehensive	~$2,000 (varies by state)	Own-vehicle repairs, fire, theft, vandalism, natural disasters plus TPPD

¹ Premiums are illustrative and will vary based on location, vehicle age and driver profile.

If you find the potential out-of-pocket repairs creeping above your risk threshold, talk to your insurer about upgrading. A quick review could reveal a modest premium increase for substantial extra protection.

4. Public Liability Insurance: Beyond Vehicle Accidents

Running a taxi isn’t just about what happens on the road—sometimes you need cover for incidents that have nothing to do with a collision. Public liability insurance steps in when people or property suffer harm while your business is operating, whether that’s inside the cab, at your dispatch office or anywhere your taxi touches down. This policy protects you if a passenger slips on a wet floor, belongings get damaged during a trip or a bystander is hurt in a non-driving incident.

Common Scenarios Covered

Public liability insurance typically handles events such as:

Passenger injuries on entering or exiting the taxi (e.g. a slip or trip).
Damage to personal items, like a spilled coffee staining a passenger’s laptop bag.
Accidental damage to third-party property away from the road (for instance, bumping into a shop window while manoeuvring in a tight space).

These examples show how non-crash mishaps can lead to compensation claims—claims that public liability cover can absorb on your behalf.

Minimum Coverage Amounts

Most taxi operators opt for a minimum public liability sum insured of $10 million, reflecting the potential scale of third-party claims. Some states and territories may set higher floors, depending on local regulations and the size of your fleet. Checking your jurisdiction’s guidelines ensures you meet both your legal obligations and your customers’ expectations of financial protection.

How to Make a Public Liability Claim

When the unexpected happens, a smooth claims process can make all the difference. Follow these steps to keep your claim on track:

Secure the scene and attend to anyone injured, then arrange medical assistance if needed.
Gather evidence—take photographs, note the time and location, and collect contact details from any witnesses.
Report the incident to your insurer as soon as possible, providing a clear incident statement and supporting documents (receipts, medical reports, repair quotes).
Keep records of all communications with third parties and your insurer, including reference or claim numbers.
Cooperate with any investigations and follow up until the claim is settled.

Prompt, organised reporting not only meets most insurers’ requirements but also helps you protect your reputation and keep your taxi business running without a hitch.

5. Workers Compensation Insurance: Protecting Your Drivers

If your taxi business employs drivers—rather than operating solely as an owner-driver—you’ll need workers compensation insurance. This cover is more than just a legal formality: it safeguards your team if they’re injured on the job and protects your business from potentially crippling liability.

Workers compensation responds to incidents such as slips at dispatch hubs, injuries during vehicle maintenance or accidents on the road. Without it, you could be on the hook for significant medical bills, rehabilitation costs and lost-wage claims. Each Australian state and territory has its own scheme, but the underlying principle is the same everywhere: employers must provide financial support for work-related injuries.

Who Needs Workers Compensation

Owner-Driver vs Employed Driver
If you’re the sole driver of your taxi and operate as a sole trader, you won’t usually need workers compensation for yourself. The moment you hire drivers as employees—whether full-time, part-time or casual—workers compensation becomes mandatory.
Independent Contractors
Cover requirements can vary if your drivers are engaged as contractors rather than employees. In many jurisdictions, a contractor may be excluded—but if you retain direction and control over their work, you may still be liable. When in doubt, check with your state authority or adviser.
State Schemes
Each state and territory runs its own scheme (for example, icare in NSW, WorkSafe in Victoria, WorkCover in QLD). These schemes set the rules on who counts as a worker, minimum premiums and employer obligations.

Coverage Elements

Workers compensation policies typically include:

Medical and Rehabilitation Expenses
Funds for hospital stays, surgeries, physiotherapy and any rehabilitation services required after an injury.
Weekly Income Benefits
A percentage of the worker’s pre-injury earnings, paid while they recover and cannot perform their normal duties.
Lump-Sum Payments
Compensation for permanent impairment or serious and permanent injuries, calculated according to state-defined tables.
Death and Funeral Benefits
Payments to dependants if a work-related incident results in a fatality.

These core elements ensure that injured drivers receive the care they need without delay, and that your business retains protection against large, unexpected costs.

Compliance and Reporting

Staying compliant with workers compensation requirements involves a few ongoing steps:

Register Your Business
As soon as you take on staff, register with your state’s workers compensation authority. This will involve providing business details, payroll estimates and, in some cases, proof of your existing policy.
Report Injuries Promptly
Most schemes require you to notify them of any work-related injury within a set timeframe (often 48 to 72 hours). Late reporting can lead to penalties or claim refusals.
Maintain Records and Annual Returns
Keep thorough records of wages, hours worked and claims lodged. You’ll typically need to lodge an annual return detailing your payroll and any claims history, which determines your premium for the following year.
Review and Renew Annually
Reassess your cover and payroll estimates before each renewal. If your number of employees or total wages change significantly, update your policy mid-term to avoid under- or over-insuring.

By understanding who falls under your workers compensation obligations and staying on top of registration, reporting and record-keeping, you’ll protect both your drivers’ welfare and your business’s financial health.

6. Regulatory Compliance: Meeting State and Territory Insurance Regulations

While securing the right covers is essential, taxi operators must also meet a broader set of legislative obligations. From licensing and accreditation to insurer authorisation and indemnity minima, each state and territory compounds your insurance requirements with its own rules. Missing just one detail can trigger fines, void your cover or even see your taxi licence suspended. By understanding these non-negotiables, you’ll stay compliant and keep your business on the road.

Licensing and Accreditation Requirements (QLD Example)

In Queensland, the Transport Operations (Passenger Transport) Act 1994 mandates that all operators hold a valid accreditation before carrying fare-paying passengers. Key steps include:

Completing required safety, first-aid and customer service training
Passing identity, criminal history and driving-record checks
Submitting an application to the Department of Transport and Main Roads, along with proof of vehicle inspections
Maintaining ongoing compliance through regular reporting

For full details on course modules, fees and application timelines, visit the TMR Queensland Accreditation page.

Policy Issuance and Insurer Authorisation

Not every insurance provider is cleared to underwrite taxi policies. By law, your cover must be issued by an Australian Financial Services Licence (AFSL)-authorised insurer. This ensures they’re regulated by ASIC, adhere to industry codes and can meet claims obligations. Before you sign on the dotted line, ask your broker or insurer:

“Can you provide your AFSL number and a current Product Disclosure Statement (PDS)?”
“Do you underwrite taxis and on-demand passenger transport?”

In Victoria, the Victaxi scheme specifically requires a minimum of $5 million in third-party property indemnity. Dealing with an unlicensed “taxi club” or unauthorised carrier could leave you uninsured and liable for any shortfall.

Minimum Coverage and Indemnity Terms

Each jurisdiction sets its own floor for indemnity levels, designed to protect passengers, pedestrians and property. Typical minimums include:

New South Wales: $10 million public liability for passenger transport
Victoria: $5 million third-party property cover under Victaxi
Queensland: Operator indemnity to cover any driver acting under your accreditation

Your policy must clearly state that it extends indemnity to every authorised driver—whether they’re on your payroll or contracted. Always review the “insured persons” clause in your PDS to confirm there are no gaps. With licences up-to-date, policies issued by AFSL-holders and cover levels meeting state minima, you’ll satisfy the regulatory framework that underpins Australia’s taxi industry—and have peace of mind that your insurer stands behind you.

7. Beware of Unlicensed Insurance Providers: Ensuring Your Insurer Is Legitimate

When you’re under pressure to find a competitive premium, unlicensed providers can look tempting—yet dealing with the wrong insurer could leave you footing large bills or even facing penalties. Rogue operators, often disguised as “taxi clubs” or offshore underwriters, might promise cut-price policies that turn out to be invalid when a claim is lodged. Before you sign any agreement, it pays to confirm your insurer is properly authorised and that your cover will stand up when you need it most.

Risks of Unlicensed Providers

Unpaid claims: If a provider lacks an Australian Financial Services Licence (AFSL), they may not hold the reserves to pay out large or complex claims.
Legal penalties: Both you and the unlicensed insurer can be fined by ASIC or your state regulator, and you risk your taxi licence being suspended.
Regulatory gaps: Unauthorised policies often miss critical endorsements—like on-demand passenger cover—or fail to meet the minimum indemnity levels your jurisdiction demands.

In 2023, an investigation by Insurance Business Mag highlighted several Victorian taxi clubs offering what appeared to be legitimate cover but weren’t licenced to underwrite any policies. Operators discovered their so-called insurance left them exposed and liable for claims.

How to Verify Your Insurer’s Credentials

Check the AFSL register: Visit ASIC’s Financial Services Register to confirm your insurer holds an AFSL for motor or taxi insurance.
Confirm state authorisation: Some states require insurers to be registered locally—look for an explicit mention of taxi or on-demand passenger transport cover in your PDS.
Review their PDS and policy wording: A genuine insurer will supply a current Product Disclosure Statement (PDS) on request, detailing cover limits, exclusions and claims procedures.

Verifying these credentials upfront gives you confidence that your premiums actually back a policy you can rely on.

Questions to Ask Your Broker or Insurer

“Can you provide your AFSL number and licence scope?”
“Am I covered for on-demand passenger transport under this policy?”
“What minimum indemnity levels does this policy satisfy in my state or territory?”
“Can I see a sample PDS for the taxi insurance product?”

If any answer feels vague or you’re handed only a receipt rather than a PDS, step away. A transparent, licensed provider will welcome these questions and supply clear documentation—so you can get back on the road knowing your cover is solid.

8. Comparing Taxi Insurance Policies: What to Look For

Choosing the right taxi insurance policy involves more than hunting down the cheapest premium. You’ll want a blend of cover, clarity and service that matches your operation’s size and risk profile. By comparing policies side by side, you can spot gaps, hidden fees and valuable add-ons—ensuring you don’t end up underinsured or paying for features you don’t need. Below are the key areas to focus on when you’re weighing up different quotes.

Key Features and Terms

When reviewing policy documents, pay close attention to:

Excess levels: check both compulsory and voluntary excess amounts, and how they apply per claim.
Policy limits: understand the maximum pay-out for each section—vehicle repairs, third-party property, public liability.
Optional extensions: see if you can include extras like replacement-vehicle hire, windscreen cover or 24/7 roadside assistance.
Claim conditions: note any requirements for notifying your insurer (timeframes, evidence) and whether you can choose your own repairer.

Reading the Product Disclosure Statement (PDS) line by line may feel tedious, but it’s the best way to avoid nasty surprises when you need to lodge a claim.

Premium Calculation Factors

Insurers calculate taxi insurance premiums based on a variety of risk indicators. Typical rating factors include:

Vehicle details: age, make and agreed value of the taxi.
Driver profile: age, driving record, years of professional experience.
Usage: annual kilometres, hours of operation and whether you run peak-hour shifts.
Fleet size: discounts often kick in when you insure multiple taxis under one policy.

Understanding these elements helps you negotiate better terms—such as bundling a small fleet or opting for a cleaner driver profile to secure a loyalty bonus.

Using Comparison Tools and Professional Advice

Online comparison sites can be a quick way to generate multiple quotes at once, but make sure you:

Use reputable platforms that partner with AFSL-authorised insurers.
Double-check each quote against the insurer’s PDS to verify cover inclusions.
Avoid unregulated brokers or “club-style” providers promising cut-price deals without proper licensing.

For a more tailored approach, engaging an experienced insurance broker can pay dividends. They’ll interpret policy jargon, identify overlaps or gaps and guide you towards the most cost-effective cover for your taxi business—saving you time and often, premium dollars.

9. Tips to Lower Your Taxi Insurance Premiums

Securing competitive rates on taxi insurance doesn’t mean skimping on cover. Instead, focus on strategies that reward low‐risk operations and demonstrate your business’s stability. Below are proven ways to shave your premiums while keeping essential protections in place.

Higher Voluntary Excess Options

Voluntary excess is the amount you agree to pay towards a claim. Opting for a higher excess can reduce your premium, since you’re taking on more of the repair cost yourself. Before you decide:

Assess your cash flow and emergency funds to ensure you can cover the excess if you need to claim
Compare how different excess levels affect your premium—sometimes a modest excess increase delivers a significant saving
Remember excess applies per claim, so frequent small claims might erase any premium benefit

Maintaining a Clean Driving Record

Insurers reward drivers and fleets with a history of safe, compliant operation. Fewer demerit points and no at‐fault claims translate directly into lower premiums. To keep your record spotless:

Monitor licence expiry dates and renew well in advance
Enforce a zero‐tolerance policy on mobile phone use and speeding
Run regular defensive-driving and fatigue-management training sessions
Consider fleet telematics so insurers can verify your drivers’ safe behaviour

Discounts and Incentives

Most insurers offer incentive programmes tailored to professional drivers and fleets. Common savings include:

Fleet Discounts: Packaging multiple taxis under one policy often unlocks graduated rate reductions
No-Claim Bonuses: Earn a percentage off your premium for every claim-free year
Payment-in-Full Reductions: Pay your annual premium up front to secure a further discount
Loyalty Incentives: Staying with the same insurer can result in renewal bonuses or rate freezes

Ask your broker for a detailed list of all available discounts and check whether any industry associations or membership schemes you belong to offer additional savings.

By balancing your excess choices, maintaining a clean driving history and tapping into insurer incentives, you can build a more cost-effective taxi insurance programme without compromising on cover.

10. Filing a Claim: A Step-by-Step Guide for Taxi Operators

Knowing how to file a claim efficiently can be just as important as having the right cover in place. A well-handled claim process reduces stress, minimises downtime and helps you get back on the road quickly. Below is a straightforward, four-phase guide—from the moment an incident occurs to the final settlement with your insurer and repairer.

Immediate Actions After an Incident

When an accident or mishap happens, your priority is safety—both for yourself and anyone else involved. Take these initial steps:

Ensure everyone is out of harm’s way.
Call emergency services if there are injuries.
Report the incident to police (if required by state law or if third-party damage or injury is involved).
Photograph the scene from multiple angles: vehicle damage, road conditions, skid marks and nearby hazards.
Collect names, contact details and insurance information from other drivers, passengers or bystanders.

By acting quickly, you’ll preserve vital evidence and demonstrate to your insurer that you’ve fulfilled your duty of care.

Claims Lodgement Process

Once you’ve gathered the essentials, it’s time to notify your insurer—preferably within 24 hours or as specified in your Product Disclosure Statement (PDS). A typical claims lodgement involves:

Completing your insurer’s incident report form, via phone, email or an online portal.
Submitting supporting documents: photos, police report number, witness statements and repair estimates or invoices.
Quoting your policy number and describing the event clearly, including date, time, location and weather conditions.

Keep a dedicated folder (digital or physical) for all correspondence. Note down claim reference numbers, names of the claims handlers you speak to, and any next-step deadlines. Prompt, organised communication helps avoid delays or misunderstandings.

Dealing with Repairers and Settlements

Your insurer may have a panel of approved repairers, but you can often choose your own workshop, provided it meets quality standards. To manage repairs and finalise settlement:

Obtain a written repair estimate, detailing parts, labour costs and estimated turnaround time.
Confirm whether your policy includes a hire-car provision or roadside assistance.
Authorise repairs only once your insurer has approved the estimate.
Track the repair progress and stay in touch with the workshop—photos or short updates help you anticipate reopening dates.
Review the final invoice against the insurer’s settlement offer. If there are discrepancies, raise them immediately with both the insurer and repairer.

Once repairs are complete and your claim is accepted, the insurer will settle directly with the repairer, leaving you free to resume your taxi service. By following these steps methodically, you’ll protect your rights, uphold your operator obligations and maintain uninterrupted service for your passengers.

Ready to Secure Your Taxi Insurance?

You’ve now seen the seven essential covers every Australian taxi operator needs: from your legally mandated CTP through to public liability, workers compensation and fully compliant policies issued by AFSL-authorised insurers. Take a moment to audit your current arrangements against this checklist—verify your CTP levels, weigh up comprehensive versus third-party property damage, confirm public liability limits, ensure your drivers are covered under your workers compensation, and check that your insurer and policy wording meet all state and territory requirements.

If you discover any gaps, or simply want to compare your premiums and policy features against a broader market, help is at hand. National Cover combines ASIC-licensed pricing research with expert support to deliver competitive taxi insurance quotes tailored to your business. Whether you run a single cab or a busy fleet, we’ll guide you through the options and fine-tune cover so you stay compliant and cost-effective.

Ready for peace of mind on the road? Visit National Cover’s homepage to request a no-obligation quote, or give our team a call—your next policy could be the best one yet.