Business car insurance

Business car insurance explained

By Mehdi Punjwani on Monday 17 February 2020
 

If you drive your car for work as well as your private life, you might want to consider business car insurance

Man changing gear in his car

Price cuts

What is business car insurance?

Business car insurance covers your car if you use it for work. Ordinary car insurance policies won’t cover business use – so it’s important to make sure your car is insured at all times.

Lots of people use their personal car for business purposes. For instance, you could drive between different sites during work hours, or if you’re a doctor, care worker or cleaner, you might use your car to drive between clients. You may drive from your place of work to the bank, to meetings, or to visit clients or customers.

Do I need business car insurance?

If you use your car while working, you need business car insurance. If you’re involved in an accident while using your car for work and you haven’t bought business car insurance, you will be unable to make a claim – and you may be committing an offence.

Ordinary car insurance will only cover you for so-called ‘social, domestic and personal use’, which includes visiting friends, driving to the shops or taking a day out. Many insurers will also automatically cover your car if you commute to and from work – but it’s a good idea to check with your provider to make sure you’re not under-insured. Business car insurance covers your car if you’re using it while on the job.

Car insurance for business use is different from commercial car insurance, which covers people who use their car as an integral part of their job – such as taxi drivers, delivery drivers or driving instructors.

If you have a company car, it’s likely you won’t need business car insurance as it should be insured by the company. However, it’s a good idea to check with your employer to make sure you’re fully insured.

What counts as business use for car insurance?

You need business car insurance if you’re using your car during work hours. Business use doesn’t include commuting to and from work, but travelling between different work locations or driving to meet customers and clients are classed as business use.

If your job directly involves using your car – for instance, if you’re a delivery driver, or drive a taxi or rideshare car – then you will need commercial car insurance, rather than business car insurance.

If you drive a van for business, you will need to take out cover that focuses on insuring vans.

Does business car insurance cost more?

Business car insurance is typically more expensive than standard cover. If you take out business car insurance, your premiums will probably be higher because insurers believe that people who use their cars for work are more likely to make a claim.

This is because drivers who use their cars while on business usually cover more miles, increasing the risk of an accident. They’re also more likely to drive on unfamiliar roads.

When getting a quote for business car insurance, you’ll be asked to provide details about your business, and how often you drive for work. If your business mileage is low, or if you only drive along a few regular routes, you may be able to save money on your premiums.

What are the classes of business car insurance?

Business use car insurance comes in several different classes, depending on what level of cover you need. These are:

  • Business car insurance class 1: Covers your car if you use it to drive between multiple work locations, or to visit clients or customers. It’s also usually the cheapest class of business car insurance
  • Business car insurance class 2: Grants the same coverage as class 1, but allows you to add a named driver – a co-worker who will also be insured to drive the same car. It’s likely to be a little more expensive
  • Business car insurance class 3: Covers long-distance driving as part of your business use. Class 3 insurance is the most expensive, but it might be necessary if you’re a door-to-door salesman, for example. However, keep in mind that you can only provide samples – if you use your car to deliver merchandise, you’ll need commercial car insurance

How can I get cheap business car insurance?

Business car insurance isn’t cheap – which is why it’s even more important to make sure you get the best possible deal. The best way to save money on business car insurance is to use a price comparison site like MoneySuperMarket.

Using our price comparison engine is easy. Simply provide a few details about yourself, your car, and your business, and we’ll compare quotes from dozens of leading providers. All the best deals are at your fingertips, and you’ll be able to quickly find a car insurance offer that works for you.

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