Business Car & Commercial Vehicle Insurance

What does business/commercial car insurance cover?

Business car insurance is needed for individuals who use their car for more than just a commute to one place of work. You’ll need business insurance for your car if:

• You commute to off-site meetings as part of your job
• You travel to other operational locations other than your regular place of work
• You run errands on behalf of your business or employer
• You regularly commute to client-sites

Commercial car insurance can cover you to perform the following activities in your car (dependent on policy):

• Work as a driving instructor
• Work as a taxi driver

There is a much higher risk with commercial car use, particularly as your job requires you to drive in order to earn money. The more time you spend on the road, the more likely you are to get into an accident and are seen as higher risk from an insurer’s perspective.

What is liability car insurance and do you need it?

Liability car insurance, also known as public liability, helps protect you from any liability costs. Specifically, you are covered if your vehicle causes incidental damage to a person or their property. If you use your vehicle for a lot of work-related travel, it might be the right choice for you to add on.

It’s designed to cover any legal costs incurred if a member of the public makes a claim against you or your vehicle.

Public liability car insurance can be added on to a policy (dependent on provider). In most cases, it will come at an extra cost. You might choose to add it to your car insurance policy if:

• You are travelling to multiple premises everyday as part of your job
• You are a driving instructor and want additional protection
• Your car is regularly exhibited at car shows, meets or exhibits

What are the business car insurance classes?

There are three classes of business car insurance – class 1, class 2 and class 3.

Business class 1 

Covers social, domestic and pleasure use as well as driving to and from your place of work. Additionally, it covers the policy holder for short business journeys.

Business class 2 

Covers everything that class 1 insurance includes, with the addition of other named drivers on the policy that are often part of the same business.

Business class 3 

Incorporates everything from class 2, but additionally covers unlimited long distance travel with no set destinations. Unlike class 1 and class 2, class 3 covers cars that are used for commercial purposes such as door to door sales (not mini-cabs, private hire or driving lessons).

How much does it cost to add business use to your car insurance?

The total cost will depend on a few factors, such as:

• The amount you already pay
• The type of car you have
• Your level of risk
• Your age
• Your driving time and mileage

As you’re likely to carry more risk, especially as you’re driving more often, your monthly premiums could be higher. Likewise, if your total mileage is likely to increase, this is another factor that will impact the cost.

Should your employer pay for business car insurance?

Company fleet managers might arrange business car insurance for each of their fleet vehicles, but it’s best to assume they haven’t. Whilst many larger corporations naturally cover this, it’s still your responsibility to check you’re insured before you start driving.

In terms of costs, insurance premiums are normally taken care of by your employer as they own the vehicle. However, if you’re adding business use to your domestic car, you’ll be responsible for paying the premiums on time and in full. If you don’t, you’ll void your car insurance.

Can you tailor insurance for small businesses as well as large enterprises?

Our dedicated team of expert commercial vehicle and business car insurance brokers are always happy to help with any queries about our range of business motor insurance policies. We are also capable of tailoring insurance for small businesses as well as large enterprises, meaning you always have relevant options available for you. Let us walk you through the process.

Option of a company car or car allowance? What to choose

The choice is a difficult one that many business people have to face and many aren’t aware just how much you’ll need to consider. To help arm you with the knowledge you need to make an informed decision, we’ve reviewed the pros and cons of each. We’ve also created a helpful tool that allows you to determine whether a company car or car allowance will work best for you.