Hire & Reward vs Goods in Transit: What is the Difference?
Hire & Reward and Goods in Transit insurance cover completely different things — one protects how you use your van, the other protects what you carry. Here’s how to tell which you need, and why many tradesmen and couriers rely on both.
If you drive a van for work, you’ve probably heard of Hire & Reward and Goods in Transit insurance. They sound similar, but they cover completely different risks. One protects how you use your van, while the other protects what you carry inside it. Confusing them could leave you uninsured even if you think you’re covered. This guide explains the difference, who needs which type of cover, and why many tradesmen and couriers need both.
What Is Hire & Reward Insurance?
Hire & Reward (often called “carriage of goods for hire or reward”) is the cover you need when you are paid to transport goods that do not belong to you.
Examples include:
- Couriers delivering parcels for companies or online marketplaces
- Delivery drivers carrying items for customers
- Tradesmen transporting products they have sold
Why it matters:
If you deliver goods for payment without Hire & Reward cover, you are classed as driving uninsured. Standard business-use or social-use insurance will not protect you.
Hire & Reward is a legal requirement under the Road Traffic Act for anyone carrying goods or passengers for payment (see GOV.UK operator licence guidance).
What Is Goods in Transit Insurance?
Goods in Transit (GIT) insurance protects the items you carry against theft, loss, or damage while they are being moved from one place to another.
That could be:
- A tradesman’s tools
- A courier’s parcels
- A removal firm’s customer property
If the goods are stolen, damaged, or destroyed during loading, transport, or unloading, GIT covers the cost up to the insured limit.
Even if your van itself is insured, that does not mean your cargo is covered. GIT is vital for anyone whose livelihood depends on the goods they transport (read more about Goods in Transit here)
Key Difference Between Hire & Reward and Goods in Transit
|
Aspect |
Hire
& Reward |
Goods
in Transit |
|
What It Covers |
The use of your van for paid deliveries |
The contents being transported |
|
Who Needs It |
Couriers, delivery drivers, removal firms,
tradesmen delivering goods |
Couriers, tradesmen, removal firms |
|
Legal Requirement |
Yes: required if transporting goods for payment |
No: optional but often required by clients or
contracts |
|
Example |
You are paid to deliver a parcel for someone else |
Your van is broken into and client goods are
stolen |
|
Common Mistake |
Assuming Goods in Transit includes Hire &
Reward |
Assuming Hire &
Reward covers the goods |
Why You Might Need Both
Many drivers need both policies.
- Hire & Reward keeps you legal to operate.
- Goods in Transit protects what you carry.
Example:
A self-employed courier delivering items for online retailers needs Hire & Reward to operate legally, and Goods in Transit to protect the parcels if they are lost or damaged.
If you combine both into one specialist policy, you can often secure cheaper overall premiums than buying them separately. Brokers can help compare combined cover options designed for couriers and tradesmen.
Common Mistakes to Avoid
- Assuming one policy includes the other.
- Using standard business-use insurance for paid deliveries.
- Underinsuring the value of goods or tools.
- Forgetting to declare changes in job type or van use.
For more on underinsurance, see the Aviva's new guide to underinsurance.
FAQs
Do I legally need Hire & Reward insurance?
Yes. If you are being paid to transport goods or passengers, Hire & Reward is required by law. Without it, you could be fined or have your vehicle seized (GOV.UK hire & reward licence guidance).
Is Goods in Transit cover mandatory?
No, but it is strongly recommended. Many courier contracts, trade networks, or e-commerce platforms require proof of GIT cover before they will work with you
Can I get both in one policy?
Yes. Many insurers or brokers offer combined policies that include both Hire & Reward and Goods in Transit under one premium.
What happens if I do not have Hire & Reward but still deliver goods?
Your insurance will be invalid, any claim may be rejected, and you could face penalties for uninsured driving.
Bottom Line
Hire & Reward and Goods in Transit insurance cover different things but often work together.
- Hire & Reward covers what you do: carrying goods for payment.
- Goods in Transit covers what you carry: the items themselves.
Without the right combination, you are exposed legally and financially. Combined policies can often reduce premiums while keeping both risks covered. Always check your policy with an FCA-authorised broker or a trusted trade-specialist intermediary.
VanCompare Editorial Team
The VanCompare Editorial Team produces clear, practical insurance guides written for UK tradesmen, couriers, and small business owners. We work with FCA regulated insurance brokers and providers to translate complex insurance topics into plain English, helping drivers make informed decisions about their cover.
Our content is fact-checked against official UK sources including the FCA, GOV.UK, ABI, and MoneyHelper, ensuring accuracy and regulatory alignment.
