If you or your employees use a car for business then you need a proper business car policy.
Private car policies do not include business use beyond commuting. For an insurer, commuting is defined as travelling to and from one fixed place of work, and this is what most people do, driving to the same office everyday. It is worth noting that business use can be something as simple as going out to buy coffee for the works canteen, or delivering a letter. Should there be a serious incident, an insurer and the local authorities such as the police, will want to know all available details. If the insurer then decides not to cover the driver, they could end up being personally liable as well as in serious trouble with the law.
Additionally, if an employee of yours is driving without proper business use car insurance and has an accident, there could be serious consequences for your company. Employers have a legal responsibility to ensure the safety and wellbeing of their employees at work or on work business, which extends to car travel. In certain circumstances, a company can also be held liable for the actions of its employees, so it makes sense to ensure you are covered properly in case your employee or a third party ends up being injured.
Business use car insurance comes in several different policy types, depending on what your business is, what cover you require, and how the car is used in relation to the business. The definitions below are general, as there are slight variations from insurer to insurer.
Business Car Insurance Class 1
Aimed at drivers who own their own vehicle which they use for business as well as for their own private purposes. Normally available with social, domestic and pleasure cover, and often you can add your spouse too.
Class 2 business car insurance
This cover is similar to class 1 in that it covers a policyholder’s vehicle for business use, but doesn’t necessarily cover any personal use. In the case of class 2 cover, the policyholder is usually the company itself, wanting to cover pool cars or other vehicles the company owns. Social, domestic and pleasure use can usually be added to these policies if required, but it is worth noting that if this is not included, then the car can only be used strictly for business use, so borrowing it to pop out to post a personal letter or some such private errand will not be covered.
Business Car Insurance Class 3
This is sometimes known as “commercial travelling”, where travelling is part of the driver’s occupation. Sales reps fall into this category as they will travel to their own and other people’s premises for work purposes. The cover is not designed for companies that transport passengers or goods for payment.
Insurance for Hire and Reward
These policies are specifically for companies whose trades are transporting people or goods, such as taxi drivers or couriers, where transport is the main function of the job. The same goes for hauliers too, although it may also sometimes be called haulage insurance or courier insurance.
In conclusion, if your vehicle is used in connection with any business at all, bar commuting, you will need company car insurance.
M Withers is Commercial Manager at Coversure who offer all classes of business car insurance quotes including courier insurance.