February 19, 2011
Why Should I Have Business Car Insurance?
A business car policy is required for anyone using their car for business
A private car policy will not cover you for business use. Some private policies will include commuting cover, but this is only to and from a single, regular place of work, which is sufficient for most people who work in the same location every day. If you use a car for any business purpose other than this, then a private policy will not cover you and you are technically driving around uninsured. Even if it’s just dropping off a business letter on the way home, this is business use and falls outside commuting, so should an incident occur, it could be costly to you personally, and result in points on your licence and higher insurance costs.
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.
Class 1 business car insurance
When drivers own the vehicle they will be using for business, this is the cover required. It normally includes social, domestic and pleasure use, and can be extended to include a husband or wife too.
Business insurance for Cars – Class 2
This class of business car insurance covers a policyholder’s car for named drivers using the vehicle for business. Generally the policyholder will be the company itself (for company owned vehicles or pool cars), but can be applied to individuals. Nowadays these policies usually include some social domestic and pleasure cover too. In the example above, where a letter is posted on the way home, the reverse can also happen and needs to be covered. For example, an employee runs a personal errand whilst on their way to a meeting.
Class 3 business car insurance
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.
Hire and Reward
Hire and reward policies are necessary when transportation is the main purpose of a business. So couriers and hauliers need this form of insurance. Taxi insurance is also a form of hire and reward cover.
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 & Marketing Manager at Coversure who offer quotes for company car insurance including courier insurance.
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