The Future of Taxi Insurance Under UK’s Automated Vehicles Act

The UK is preparing to welcome driverless taxis. The Automated Vehicles Act, passed in May 2024, has set the legal groundwork for fully autonomous vehicles also called “robotaxis” to operate without a human driver, potentially from 2026. This landmark shift will change how drivers, operators, and insurers think about protection in the private hire industry.

Up until now, insurance for taxis focused on the human behind the wheel. Standard taxi insurance is built to cover the risks faced by a professional driver things like accidents, passenger injuries, and damage to the vehicle during day-to-day work. But as we move into a world where a car can drive itself, those responsibilities start to shift.

The Act introduces two clear categories. First, “user-in-charge” vehicles still have a driver who can take control at any time. Second, “no-user-in-charge” vehicles are fully autonomous and need no human oversight. In the second case, if an accident happens, the responsibility could fall on the manufacturer, software provider, or fleet operator not the owner or passenger.

This raises big questions for those in the industry. If you’re planning to operate a fleet of robotaxis, your cover may look more like product or technology liability than traditional commercial car insurance. You might need policies that cover software failure, hacking, or system errors not just collisions.

For self-employed drivers or small fleet owners, this shift may feel unsettling. You might wonder whether your existing taxi insurance will still apply, or if costs will rise as human-driven cars become less common. While traditional cover remains valid for now, insurers may begin adjusting rates or introducing hybrid products to account for mixed-use vehicles.

Government-backed trials for driverless taxis and buses are set to begin in spring 2026, with full implementation expected from late 2027. These pilot projects will run in small zones where local authorities approve. Safety remains central. All autonomous vehicles must meet a legal standard described as being “as safe as a careful human driver.” Before being allowed on public roads, they must pass strict safety tests and gain authorisation from regulators.

This authorisation process will also determine how these vehicles are insured, how they respond to incidents, and what sort of data they must collect. With these controls in place, many insurance companies are already preparing for a gradual transition. For now, the focus is still on policies that protect individual drivers, but the longer-term shift will be toward systems that protect networks of vehicles owned by firms or tech operators.

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That doesn’t mean human drivers will disappear overnight. Traditional taxis will remain on the road for several years. During this time, having the right taxi insurance is still essential. Drivers should keep up to date with policy terms and speak with their broker or provider to ensure their cover evolves as technology does.

In fact, this period of overlap might bring more risk. Autonomous features can reduce accidents, but they also introduce new complexities. If a semi-automated car fails to alert a driver in time, who’s at fault? These grey areas make it more important than ever to have strong legal support within your policy.

Some operators might see opportunity in this change. Robotaxis could reduce the pressure on driver availability, lower accident rates, and create new jobs in technical support, fleet management, and compliance. For larger firms, switching to automated vehicles might unlock efficiency gains and long-term savings if the right protection is in place.

The real shift is in how we define risk. It’s moving from human behaviour to system performance. But insurance will still play a vital role only now it must cover not just the vehicle, but also the digital brain behind it.

As the industry changes, one thing remains: vehicles used for hire will always need proper insurance. Whether the driver is human or not, safety, legal compliance, and financial protection still matter.