When you get a quote to insure your car, it’s important that you tell your insurance company exactly what you’re going to be using it for. The trouble is, many people aren’t certain what car insurance companies consider to be ‘business use’ or ‘commercial travelling’.
If you use your vehicle for business use without letting your insurer know – even without realising – you could find that you’re driving without cover. As such, you could find that you’re breaking the law – or your insurance company refuses to pay out if you’re involved in an accident.
To make sure you’re covered, we’ve put together a guide to make sure business car insurance is explained in full.
We’ll cover a range of questions about car insurance for business use, including:
- What is commercial travelling?
- What does business car insurance cover?
- What does ‘commuting’ mean?
- How can you get business car insurance cost-effectively?
When you’re finished reading – you’ll know for certain what kind of cover you’ll need.
Do I need business car insurance?
People often search for a set car insurance business use definition – but the truth is, there isn’t just one type of business policy. Instead, insurers tend to break their cover down into different classes.
Let’s look at each of those classes in a little more detail.
Social, domestic and pleasure
Sometimes referred to as ‘SD&P’, this level of cover means you can do normal day-to-day driving – like going to the supermarket, visiting friends and family, or having a day out. This type of use will not cover you if you drive your car to get to or from work.
Social and commuting
As well as what’s covered in an ‘SD&P’ policy, a social and commuting policy covers you for commuting to your workplace, i.e. driving there and driving home. You’ll need this type of cover even if you don’t take your car all the way to work – for instance, if you drive to the train station then take the train to work. You’re also likely to need social and commuting cover if you drop someone else to work – even if you’re not commuting yourself.
It’s worth noting that this type of cover does not allow you to drive your vehicle for any kind of business use. Commuting to work is fine, but using your car for any driving that’s related to your work is not.
Business (Class 1)
You’ll need Business Class 1 cover if you use your vehicle for anything relating to the work you do. For example, if you work in one location, but you need to travel to another office or site – or if you need to travel to a meeting, or run a work errand, like picking someone up from the station. Commercial travelling is often covered by this level of insurance too – protecting you if you need to drive your car and stay away from home, on a course for instance.
Business (Class 2)
Business Class 2 cover is very similar to Class 1 – but it also allows a named driver to do the same. For example, if a named driver wishes to take the vehicle to their workplace – then needs to drive to a meeting, Class 2 cover will be required.
Business (Class 3)
If you do a lot of travelling for work, you might meet the criteria for Business Class 3 insurance – designed for people who are frequently travelling between business locations. This level of cover would be appropriate if you’re a salesperson visiting numerous clients, an inspector visiting lots of sites, or a community support worker working at service user’s homes.
Commercial insurance is designed for people whose vehicle is primarily used for business. For example, if you were a taxi driver, a driving instructor, or even an ice-cream van owner, then you would need commercial cover for your vehicle.
Which kind of cover is right for you?
Hopefully, those definitions will give you an idea of which level you need if you’re searching for business car insurance quotes. If you’re in any doubt about what’s right for you, you can get in touch with the team here when you request a quote. That way, you can be sure you’re not going to be paying for cover you don’t need – but you’ve got the right level of cover to protect you if you ever need to make a claim.
How much does it cost to add business use to car insurance?
In much the same way that your insurance quote will be tailored to suit your exact need – business cover will be treated in the same way.
So, if you’re driving your vehicle a few miles to work each day on quiet roads, you can expect to pay less than someone who has a 40-mile commute through a busy city centre.
There are a huge number of factors that will decide how much you pay for your business use, including:
- The kind of work you do
- The routes you’ll be driving
- The miles you’ll cover
- Equipment or goods you’re carrying
How much does commuting add to car insurance?
Again, insurance cover that protects you when you’re commuting depends on the kind of commuting you do. If you’re driving a few miles a secure company car park, your cover will be significantly less than if you have to drive a long way, tackling busy roads and rush-hour traffic – before parking your vehicle on a public street.
The best way to find cover that fits your needs exactly is to talk to the team here when you request a quote. Everyone’s requirements are different – so to make sure you get the very best value for money, we’ll take your exact circumstances into account.
What’s the most cost-effective way of insuring for business?
With business insurance, it’s important to remember that even if you just use your vehicle for business use once during your annual policy, that’s still considered business use – so you’ll need to have adequate cover in place.
So, what happens if you’re only going to be using your car for business use once a month? Or just a handful of times during the year? Does it make financial sense to buy an annual policy that covers you for much more?
The answer is often no. Don’t misunderstand – you will definitely need to have insurance in place – but if your car mostly used for social and domestic purposes, it might be more cost-effective to seek temporary cover on the rare days you need business cover, rather than covering yourself for the full year.
Of course, this will be different for everyone – but if business use increases your premium significantly, it could be worth looking at temporary business car insurance quotes as and when you need the cover.
Will your employer pay for business cover on your car insurance?
Although it isn’t always the case, some employers will cover the additional cost of business car insurance – so it’s worth asking if you’re not sure.
This is especially true if your vehicle lets you do additional duties within your role. For example, if a social care company pays for business car insurance for the carers they employ, it will often mean they can cover more shifts, or take the people they support to appointments and activities.
In cases like this, you’ll often find that you’re paid an increased mileage allowance, rather than simply reclaiming the cost of your business cover each month. In other cases, companies have their own insurance policies that can cover employees for using their own vehicles – so it’s worth asking if you need your car for your work.