As an approved driving instructor (ADI), there are several business expenses you’ll need to make, including marketing expenses, and overheads such as vehicle maintenance and fuel. But what kind of insurance do you need? Obviously you’ll need some form of car insurance (which is a little more specialised for driving instructors), but what other types of cover should you put in place for your business?
Here we look at the types of business insurance it’s worth considering for protecting your driving school, and the kind of peace of mind they offer.
In this article:
Public liability insurance: Not mandatory, but arguably essential
As a driving instructor, it’s well worth considering taking out public liability insurance. The purpose of this is to cover the cost of any claims made by members of the public for incidents which occur in connection with your business.
This type of insurance could protect you in the event of:
- Personal injuries
- Loss of or damage to property
- Death
Public liability insurance usually covers incidents which occur on business premises, but can also cover incidents which take place as a result of activities organised by your business.
We can’t tell you to take out this kind of insurance. But we can tell you that many businesses consider it essential, and with good reason.
Let’s say your pupil is involved in a collision with a third party. Having public liability insurance in place could cover you for any legal fees, medical expenses and any potential compensation claims which arise.
It’s also worth noting that it doesn’t just cover third parties. Public liability insurance covers anybody you interact with, including customers – which means your pupils will be covered too.
Without this type of cover in place, there’s a very good chance that the costs associated with a single incident could put you out of business.
Professional indemnity insurance: Worth considering
Professional indemnity insurance is designed to protect professionals who provide advice or instruction. It can cover you if somebody alleges you caused them a loss – whether that’s financial or reputational.
So, as an ADI, this type of insurance can protect you if a pupil alleges that your instruction was negligent, possibly leading to a collision. It can cover legal costs and potential compensation claims.
Again, we can’t advise you on what type of insurance to take out for your business. You need to weigh up the likelihood of this happening to your business, and whether you feel it’s a cost worth absorbing to protect your driving school.
Business interruption insurance: Worth considering
As a self-employed instructor, you’re only paid while you’re working. But what happens if you’re out of action? If you fall ill, or your car is damaged and needs to be repaired, how do you safeguard your income?
For these reasons, it’s worth considering taking out business interruption insurance, which can provide cover for unexpected events which disrupt your teaching business. This could prove useful to help cover your costs, or possibly provide a temporary replacement vehicle if needs be.
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Cover for your vehicle: Mandatory
Obviously, all drivers need to have adequate insurance in place to drive on public roads in the UK. However, normal car insurance policies are insufficient to cover driving instruction. As you’ll be charging for your services, you need to take out specialised hire and reward cover.
This is also true of those who opt for the DVSA Trainee Instructor Licence Scheme while training for the ADI Part 3 instructional ability test. In other words, if you’re a potential driving instructor (PDI), you’ll need specialised insurance to instruct pupils.
In order to take out driving instructor insurance, you’ll need to approach a specialist insurance provider, which will usually tailor a policy according to your needs.
At the very least, you’ll want a policy which covers your vehicle and your pupil in the event of a collision. It’s also worth considering other factors such as covering your dual controls, and whether you need a dual-control courtesy car if your own vehicle is off-road for any reason.
There are numerous insurance providers available which can provide bespoke driving instructor policies. Before you commit to one, be sure to compare prices and policies to see that you’re getting the right deal for your circumstances. Also, look at review sites with legitimate trainee reviews, to see how they stack up against other providers.
Which types of business insurance do I need as a driving instructor?
As mentioned, while car insurance is a legal requirement, you need a hire and reward policy in place to cover giving driving lessons. This is the only legal insurance requirement. But there are other types of business insurance which could give you peace of mind, protect your assets, and mitigate potential risks associated with the profession.
If you’d rather defer these kinds of decisions, it may be an idea to join a franchise which organises your insurance for you. For example, if you join an AA franchise, comprehensive car insurance and breakdown cover are included in the weekly fee as standard.
Check out our guide on whether you should join a franchise to find out more.