Hire and reward truck insurance is less a separate product than a description of use: the truck carries goods belonging to other people, for payment. It sits at the centre of every heavy vehicle policy, because the use you declare shapes the price, the covers offered and how a claim is assessed. If you are setting up or reviewing your truck insurance, this is the question to get right first, and it is the one most likely to change quietly as a business grows.
Own Goods Versus Hire and Reward
Insurers generally split truck use into two broad camps.
- Own goods, or business use. The truck carries goods, materials or equipment that belong to the business running it. A builder carting its own materials, a farmer carting its own grain, a landscaper moving its own plant.
- Hire and reward. The truck carries goods that belong to someone else, and the operator is paid to move them. A general freight carrier, a tipper paid by the load to cart for a civil contractor, a courier, an owner-driver subcontracted to a larger transport company.
Plenty of businesses sit in grey areas. A farmer who carts a neighbour’s grain at harvest for a fee. A landscape supplier that charges for delivering products it has sold. A builder who lends the truck and driver to another builder for a week. Some of these look like own goods and some look like hire and reward, and insurers do not all draw the line in the same place. Describe the arrangement plainly and let your broker confirm how the insurer sees it.
Registration categories for heavy vehicles also vary by state, and some distinguish commercial carrying from private or business use. Check the current requirements in your state; the registration category and the insurance description should tell the same story.
Why the Declared Use Matters at Claim Time
Underwriters price the risk from the description you give them. Carting for others typically involves more kilometres, tighter delivery windows, more varied routes, unfamiliar loads and liability for goods that are not yours. A truck declared as carrying its own goods is rated on a different picture.
If the truck is doing hire and reward work at the time of an accident and the policy describes it as own goods use, the claim may be questioned. Depending on the wording and the circumstances, an insurer may reduce or refuse the claim, or the business may face a long argument while the truck sits in a yard. The premium saved by understating the use is small next to that outcome.
The same applies to the other parts of the description: the types of goods carried, the areas and distances travelled, and whether the truck pulls trailers. Each is part of the risk the insurer agreed to take on.
The Goods on the Back
A motor policy deals with the truck and your liability to other road users. It generally does not deal with the load.
- Your own goods can be insured under a goods in transit policy that protects your property while it is being carried.
- Other people’s goods raise a different question: your legal liability as a carrier for loss or damage to them. That depends on your terms and conditions of carriage and on what your customers’ contracts say. Some customers expect you to carry cover for the full value of their goods regardless of fault.
Our guide to goods in transit insurance explains how the cover is structured. When you move into hire and reward work, check that the goods cover follows.
Subcontracting to Other Carriers
Subcontracting runs in two directions, and both affect your insurance.
When you subcontract work out, you usually remain responsible to your customer for the goods and the delivery. If the subcontractor’s truck crashes or the load is damaged, your customer will often come to you first. Ask subcontractors for a certificate of currency, check their use description and limits, and ask your broker whether your own goods cover extends to loads carried by subcontractors.
When you are subcontracted in, the prime contractor commonly asks for motor cover with a stated third party property limit, public liability, goods cover, and sometimes to be noted on your policies. Their contract may include indemnities that go further than your policy does. Have it reviewed before you sign.
If you pull other operators’ trailers as part of that work, you also need cover for the trailer while it is in your control. Our page on trailer in control insurance explains how that works.
Changing Use Mid-Policy
Use changes gradually. A builder starts carting for a mate, then for a few other builders, and a year later much of the work is paid carting. A tipper moves from its owner’s own quarry work to subcontract haulage. A local operator picks up interstate runs.
Tell your broker before the first job of the new kind, not at renewal. The insurer can then endorse the policy and adjust the premium if needed, and the cover matches the work on the day it changes. Our article on when growing transport businesses should review their insurance covers the other triggers worth watching.
Getting Hire and Reward Truck Insurance Right
- Describe the use exactly: own goods, hire and reward, or a mix, with how much of each.
- List the types of goods carried, including anything hazardous, perishable or high value.
- State the areas and distances travelled.
- Say who you cart for and whether you subcontract out or in.
- Declare trailers, including other operators’ trailers you pull.
- Arrange goods cover that matches whose goods you carry.
Utes, vans and light rigid trucks used in a business raise the same question in a smaller form; see our commercial vehicle insurance page. If you are just starting out, our guide to insurance to start a trucking business sets out the full list of covers, and our truck insurance page explains what we arrange.
Common Questions
I only cart for others occasionally. Does it matter?
Yes. Even occasional paid carting can change how the insurer sees the risk. Tell your broker and let the insurer decide how to treat it.
My customers pay for delivery of goods I sold them. Is that hire and reward?
The goods are usually still yours until delivery, which points to own goods use, but insurers define use differently. Describe the arrangement and have your broker confirm it with the insurer.
Does my truck policy protect the goods I carry for customers?
A motor policy generally does not respond to the load. Goods belonging to others need carriers liability or goods in transit cover that extends to them.
Talk It Through
Request a quote or call 1300 983 940 and we will make sure your use description matches the work your trucks actually do.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.