Every year there are more than five million road accidents in the UK. 1 in 4 involve a business driver. Pretty serious stuff, right? We’d like to think all drivers involved were covered by the necessary business car insurance policy but the reality is many people are still unaware what constitutes business use of a vehicle. This means that, right now, there could be thousands of uninsured business drivers on the road.
If you are involved in a crash while driving for business purposes you will not receive the compensation you deserve unless you have the appropriate cover. Read on to find out what business car insurance is, whether you need commercial vehicle insurance, what class of cover suits you best, and where to find the best deal.
Let’s start with the good news. If you only use your vehicle to commute to and from work your personal insurance policy will normally keep you covered. You may not need business cover.
But just think. Do you…
If you do, you need business car insurance to stay covered.
If you step behind the wheel for anything work-related other than your daily commute, you need business car insurance. Some of the reasons insurers treat it differently are because people who drive for work might:
This isn’t true of everyone who drives for work, of course. So it’s important to be clear about what your needs are to your insurer.
Basically, business car insurance is an insurance policy that covers your vehicle for business use. There isn’t a one size fits all business vehicle insurance policy. Based on your different requirements you can pinpoint which one suits you best. The three policy types are as follows:
Class 1 Business Car Insurance
Business class 1 car insurance covers you for social, domestic and pleasure use in addition to driving to and from your place of work. It also covers the policy holder for short business journeys between different sites. Sometimes this class of business car insurance will also cover your spouse, but this will differ depending on your insurer (no other named drivers). Class 1 business use will not cover commercial use for deliveries or door to door sales of any kind.
Class 2 Business Car Insurance
Class 2 business use expands from class 1 business insurance to include additional named drivers on the policy that are usually part of the same business as the policy holder. As with class 1 business insurance, this class does not cover deliveries or selling of any kind.
Class 3 Business Car Insurance
Including everything class 2 business insurance covers, class 3 business car insurance also covers the policy holder for unlimited long distance travel with no set destinations. This class of business insurance covers cars used for commercial purposes such as door to door sales. However, commercial insurance will need to be organised for cars used as mini-cabs, private hire or for driving lessons as this is more specialist.
Each policy class varies by insurer. To prevent yourself getting caught out contact one of our experienced business car insurance brokers who can talk you through the commercial vehicle insurance process and find you the perfect policy for the best price.
Won’t my employer’s insurance cover me?
Some large businesses may have insurance policies that cover their employees if they have an accident while driving their own car for business use. If your employer does you may not need business car insurance at all. Either way it is important to check, whether that’s to prevent you from taking out an unnecessary policy or to stop you from driving without business insurance.
If it doesn’t can I ask them to pay?
It is common for employers to reimburse employees for the costs incurred while driving their personal vehicle for business use. This is to cover business insurance as well as wear and tear that occurs as a result of the extra miles covered. This means the amount you are paid per mile should be higher than the cost of fuel. 45p a mile is the fairly standard rate but this can vary dependent upon employer and distance covered.
What if I drive a company car?
Good news if you drive a company car, your employer should have covered you for both personal and business use. However, it is down to you to make sure. There is more information on our applying for business Car Insurance page
Will my premiums be higher?
Invariably the cost of business car insurance is higher than personal cover due to the increased risks. A typical business car user will drive further, on more unfamiliar roads and sometimes in heavier traffic than a personal user. Don’t be tempted to withhold information in the hope of getting a cheaper policy when discussing business car insurance with an insurer. This would invalidate your policy in the event of a crash, making you personally liable for covering any costs.
So I need it. How can I keep my costs down?
Business car insurance cost limiting is exactly the same as personal car insurance in many respects. If you’re yet to buy a car then you should consider engine size (the smaller the better) and fuel efficiency. You could also install extra security devices such as immobilisers, steering locks or trackers. Also try to secure off street parking for your vehicle to bring down your premium.
With specific regard to business car policies, try and agree a realistic mileage limit with your insurer. This will help you reign in your costs better than an open ended mileage agreement. However, you must be sure you won’t exceed the agreed limit. If you do your insurance will be invalid unless you pay what is likely to be a hefty charge to up the limit.
You can also help secure a fantastic deal using a business car insurance broker like us. Using skills acquired over 25 years in the insurance brokering business we can find you the perfect policy to meet your requirements, no matter how specific they may be.
Where can I go to get a good deal?
As with any type of insurance policy, doing your research and shopping around will help you find a good deal. However, as a specialist insurance broker of 25 years we have a huge amount of experience in arranging personalised business car insurance policies for individuals and companies alike. Contact us today for more information on how we can find you the ideal commercial vehicle insurance policy.
For more of our Business Insurance Frequently Asked Questions click here.
 Source: Transport Statistics Bulletin. Road Casualties in Great Britain.