Car insurance has a variety of different classes which denote how you’ll use your car and what you’re covered for.
Most commuters will often declare Social, Domestic, Pleasure and Commuting, which covers the average working person adequately. However, some people may need more cover than this, especially if they’re driving for business purposes.
Just to recap, the car insurance classes of use are:
- Social, Domestic and Pleasure (SDP)
- Social, Domestic, Pleasure and Commuting
- Personal business use, which is split into:
- Class 1 business
- Class 2 business
- Class 3 business
- Commercial
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What Does Each Car Insurance Class Of Use Cover?
Social, Domestic and Pleasure (SDP)
SDP covers all non-work driving. If you’re only going to the shops, any holidays or visiting family, then you can use the SDP class. If you think you could go into the office, then it’s best to include commuting.
Social, Domestic, Pleasure and Commuting (SPDC)
This includes everything in SDP as well as commuting, or part commuting to a single place of work. If you park and then get the train the rest of the way to the office, then you should use SDPC.
Class 1 Business
This will cover you for everything in SPDC plus moving between different sites or a part time job that requires you to drive to a second place of work.
It doesn’t cover delivery or door to door sales work.
Class 2 Business
This includes everything in Class 1 plus the ability to add in named drivers on your policy who can use the car for the same business work as you.
Class 3 Business
Class 3 covers for long distance driving and light goods transportation that is required by your job, as well as everything in Class 2
Class 3 doesn’t cover taxi drivers, delivery drivers or those who drive with patients as part of their job.
Commercial
Commercial car insurance covers people who depend on their vehicle solely for their job, rather than just getting to their job. You might have heard this insurance class referred to as “carriage of goods for hire and reward”
When Do You Need Commercial Car Insurance?
There are a range of scenarios when you might need business car insurance to cover you. These include:
- For infrequent off-site meetings that aren’t your regular place of work, such as client pitches or agency visits.
- When you receive a company car that’s leased in either your name or your employer’s name.
- When you’re required to travel for the purpose of door-to-door sales or to deliver product samples to prospective clients.
- To run errands on behalf of the business, such as collecting deliveries or purchasing consumables for your office.
Company Cars vs. Work Cars
A company car is a vehicle provided by a firm for business and private use by one of its employees. If you have been given a company car by your employer, the appropriate insurance cover should already be in place, but it’s important to check this before you start using it.
A work car on the other hand is a car you use for business reasons during working hours. If you are self-employed, or have your own small business, it is your responsibility to ensure any vehicles you own for business purposes are covered with the right business car insurance. You will not need to apply for company car insurance cover unless the vehicles you own are titled under your company name.
If you are an employer looking for company car insurance, please see our Company Car Insurance page for more information.
How To Apply for Commercial & Business Car Insurance
01. Check If You’re Already Insured
If you are volunteering and your role involves driving a company car for business errands, it is the organisation’s responsibility to arrange the appropriate insurance cover. If however you are volunteering using your own car for business purposes, you will need to arrange business car insurance yourself.
When it comes to applying for business car insurance as a volunteer, the organisation you are volunteering with should provide you with a letter that you can forward to your insurance company. This letter should explain in detail your responsibilities as a volunteer with the organisation and whether you will be carrying passengers during the course of your volunteering.
Visit our Business Car Insurance section for more business car insurance information.
Get your quote today from one of our Business Car Insurance experts.
02. Understand Business Use
You might have changed into a new role that requires you to commute between various operational and client sites. Alternatively, you might just need cover for occasional business-related travel. Find out from your employer exactly how much travel you’ll be asked to do.
There are different classes of business use which will determine how much cover you receive. For those racking up the mileage, you may need class 3 insurance, whereas occasional travellers can be covered under class 1.
Of course, with the right insurance policy, you’ll also be covered for any social, domestic or pleasure-related use too.
03. Consider Driving Requirements & Vehicle Security
Just like on domestic car insurance, you’ll need those extra details to hand to ensure you get the right cover. For example, if your company car can be used for social, domestic and pleasure, how often will you drive it out of work hours and where might you store it at the weekend? These are all questions you’ll need to answer.
If you have a spouse or partner at home, you might be able to add them as a named driver – though this is a grey area. For a domestic car, it’s normally fine as long as your significant other is licensed to drive and has insurance. However, employers might advise against this, and the insurance company might too. It doesn’t hurt to ask, but if either say no, your partner won’t be covered.
04. Get a Quote
Before you take out car insurance, you might want to shop around first to see who is going to offer you the right protection for the right price. With car insurance, whilst it can be tempting to think that the cheapest is best, this is often not the case. It also might mean you’re uninsured for certain types of business travel.
With business car insurance, you’ll want peace of mind, especially if you’re asked to cover hundreds or thousands of miles every year. Whether you need it on a domestic vehicle or a company car leased in your name, your policy should offer security wherever you drive.
At Keith Michaels, we’re specialists in car insurance and cater to a range of clients and customers requiring business or commercial travel. From fleet managers to individual employees, we can arrange a competitive quote for you today.
FAQs about Commercial Travelling & Car Insurance
Who is Responsible for Arranging Business Car Insurance?
You (the driver) are responsible if a vehicle is owned or leased in your name. Your employer can arrange you as the policyholder, meaning it’s your job to find the right and correct insurance policy. For a domestic with business insurance included, it’s also your obligation to ensure you’re covered. However, your employer may have some suggestions to work with, or you can speak to a specialist car insurance company who can aid you.
If your employer leases or owns a company vehicle, but allows you to drive it, it’s their responsibility to seek insurance. Even if this is the case, you must make sure you are covered before you start driving it. Your employer should provide you with details of insurance for your personal records.
What Insurance Do You Need if You Volunteer for an Organisation?
If you are volunteering and your role involves driving a company car for business errands, it is the organisation’s responsibility to arrange the appropriate insurance cover. However, if you are volunteering using your own car for business purposes, you will need to arrange business car insurance yourself.
When it comes to applying for business car insurance as a volunteer, the organisation you are volunteering with should provide you with a letter that you can forward to your insurance company. This letter should explain in detail your responsibilities as a volunteer with the organisation and whether you will be carrying passengers during the course of your volunteering.
What Do You Need to Tell Your Insurer?
When you apply for business car insurance, your insurance provider will ask a series of questions to better understand your needs and working requirements. You will need to be prepared to share information about the nature of your work, the amount of time you spend behind the wheel for business purposes, and how many miles you will be clocking up in an average year.
It’s important that you are completely honest about your business car use, as failure to do so could mean you receive the wrong type of cover. If you are not properly insured, you will not be entitled to any compensation if you are involved in a crash whilst driving for business purposes. Driving without the correct cover could also invalidate your insurance.
Can You Add a Named Driver to a Business Car Insurance Policy?
Yes and no – before you add a named driver, you’ll need to check with either your company and/or your insurance provider. For domestic vehicles with business insurance added on, you may already have your spouse, partner or someone in your immediate circle listed as a named driver.
Remember, if you’ve gone for a Class 1 Business Insurance policy, your named driver won’t be covered for any business use. If you want to add a named driver and get them to receive the same level of cover, you’ll need at least Class 2.