When do you need business car insurance and what does it cover?

Don't leave yourself or your employees unprotected when they're out on business. Business car insurance can help you maintain a single outstanding level of coverage for your entire workforce and company's vehicles.

Do I need business car insurance?

As a business owner, you know that your vehicles are an essential part of your day-to-day operations. They’re a tool for getting the job done—and they’re also one of the most vulnerable parts of your business. If they were ever damaged or stolen, or involved in an incident how much would that cost your business?

That's why it's important to protect yourself and your business with a policy that covers everything from theft to damage and liability for others. We know that business car insurance isn't one-size-fits-all. That's why our policies are flexible enough to fit your needs but comprehensive enough to protect what matters most—your company and its future.

What does a business car insurance policy cover?

Business insurance for cars can compensate for a variety of claims, including:

• Protective cover for breakdowns
• Vehicle recovery after an accident
• Car loss or damage
• Coverage for personal accidents
• Costs associated with damaged personal assets
• Rental car coverage if the insured vehicle needs repair
• Repair and replacement of windscreens
• Insurance coverage when driving abroad, usually limited to a certain amount

Car insurance for business use comes in three types, just like regular car insurance. The Road Traffic Act of 1930 established car insurance as a legal requirement. Those caught driving without the minimum coverage could face heavy penalties. While a third-party policy is sufficient, there are also two other types of coverage that offer additional protection.

Third-party only cover: 

In the UK, Third Party Only (TPO) business car insurance is the minimum level of coverage required by law. The purpose of this insurance is to ensure that other road users can receive compensation in the event of an accident. Third-party insurance will not cover damage to your own car, nor will it cover theft. Insurers pay out money to compensate a third party, not to compensate the policyholder.

Third-party, fire and theft:

This policy includes all of the benefits of third-party insurance as well as theft and fire protection for your own vehicle.

Comprehensive cover: 

Comprehensive business car insurance gives you the greatest amount of protection. In the case of an accident, comprehensive coverage covers both damage to your vehicle and the vehicles of others.

Choose a level of coverage based on your car's exposure to the risks discussed above. The lowest level of coverage may not be enough to cover the cost of repairs to your own vehicle, so consider your financial capabilities. Having comprehensive coverage can help you avoid financial loss if you are ever involved in an accident with your car.

What are the types of business car insurance?

It's common for people to look for a standard car insurance business use definition, however, business insurance policies vary. This is why insurers tend to divide their coverage into different classes. There are generally three types of business insurance for cars, each covering social, domestic, and leisure purposes. These classes are:

Business class 1:

Class 1 policies cover people who travel between two or more places of employment. This type of insurance is often taken out by mobile workers, such as medical professionals or health care providers. Typically, it's the cheapest type of car insurance for businesses.

Business class 2:

This coverage provides the same level of protection as Business Class 1, but also covers an additional named driver, like a co-worker or employee. In many cases, the policyholder and named driver must be employed by the same company.

Business class 3:

Those who spend a significant portion of their working day on the road may benefit from this type of policy. As Class 3 drivers accumulate high mileage, these policies tend to be the most expensive. You can use Class 3 for light goods transportation and a number of selling activities for work purposes.

Does business car insurance cover social use?

Generally speaking, a business use car insurance policy allows you to use your vehicle for both personal and business purposes. It's important to note that this coverage is limited by the policy's terms and conditions, so always check with your insurer before you hit the road to make sure you're covered.

How much does business car insurance cost?

You'll pay business car insurance premiums based on a variety of factors, including:

• The number of drivers, their ages, and their claims and conviction history will all be taken into account

• The car's expected business and social mileage, as well as its intended use

• Premiums can also be affected by your location and estimated driving time 

• Car make and model, as well as insurance group, are key factors

Who pays for business car insurance?

Some companies provide financial perks to their employees, so check with your employer. While your employer might not cover all of your business car insurance costs, you may get reimbursed for business mileage.

A self-employed individual must pay their own bills. While business car insurance tends to have higher premiums, paying it annually and driving carefully can help keep costs down.

When it comes to insuring your fleet, you need coverage that will keep your vehicles protected as well as your employees. You'll save time and money by only having to renew your policy once for the whole fleet. Plus, our brokers have access to competitive quotes from a panel of providers, so we can do all of the searching and comparing for you.