If you or your employees use a car for business then you need a proper business car policy.

Commuting is normally covered under a private car policy but this is simply driving to and from a single, fixed place of work. No other business use would be covered. But what counts as business use? Leaving your place of work and driving for any purpose related to your business. For example, posting a letter on behalf of the business, or even buying some milk for the office kitchen. In the event of a serious incident, everything will be scrutinised closely, including the insurance arrangements and exactly where and why the vehicle was being driven. This can have serious consequences for the driver if proper cover wasn’t in place.

If you are an employer, you are also partly responsible for an employee’s actions behind the wheel and their health whilst on your business. Just because they are off the premises and in a car does not mean your responsibility under law for their health and safety does not still apply. If an employee is seriously hurt in an accident, your company may be partly liable, and this also extends to anyone else your employee may cause injury to, so it pays to be properly covered.

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

Class 2 business insurance covers a car belong to the policyholder for business use. This class differs from class 1, in that the policy holder is generally a company or other corporate entity, so the cover is used for pool cars or other vehicles. It can be applied to an individual, but in this case, care must be taken to include social, domestic and pleasure, in case the vehicle is ever used for non business use, (such as posting a personal letter on the way home).

Business insurance for Cars – Class 3

Class 3 cover is sometimes described as “commercial travelling”. It covers drivers who drive as part of their job, so long as the driving itself is not their job. As an example, class 3 business insurance would cover a sales rep., engineer on call, but would not cover a taxi driver, for this you would need something called “hire and reward”.

Hire and Reward

When a trade is specifically for transporting things or people, such as a taxi service or a haulage company, then this sort of insurance is needed, although sometimes it is described more specifically. For instance, insurance for a courier is generally described simply as courier insurance, although it is still a form of hire and reward.

So if you use your car for anything business related, other than commuting, then business car insurance is required.

M Withers is Commercial Manager at Coversure who offer all kinds of business car insurance quotes including courier insurance.

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