There are a broad range of definitions that will fit into the term ‘business car.’ From a single vehicle used to visit customer premises in a localised area, to a fleet of vehicles travelling distances to deliver goods and everything in between. For the lower end scale of business use, you may think that standard insurance will cover you and it isn’t until you disclose the purpose of your journey on an accident claim form that you discover you were not covered at all. The fact is that any journey taken for the purpose of business use needs to be covered by business car insurance.
In general terms, insurers have classes of business use. Often the biggest confusion lies within these categories: Private and occasional business use – this will cover you for personal use and commuting as well as occasional business use. However, this is only is the vehicle is not registered to the company and must not be an essential part of earning your income. For most businesses the Private and business use class is more realistic as this provides the same cover as before but the vehicle can be registered for business use. Lastly, there is commercial travelling which provides cover for those who regularly travel as part of their job, such as field salesmen, although some insurers will include this type of use in a numbered class of business insurance. These numbered classes usually refer to the type of use you will use commercial vehicles for. You will need to clearly communicate your needs when obtaining insurance quotes. Don’t be tempted to under-estimate the amount of use the vehicle will get to try to keep the cost of the premium down, you will only end up paying for a policy that may not cover you in the event of an accident or theft.
If you have any doubt, make sure you read your policy wording carefully. Contact your insurer or broker for clarification on anything you don’t understand or sounds ambiguous. Make sure you remember to notify your insurers if there are any changes to the vehicle or the vehicle use. Online insurers, such as Budget Direct, will ensure that the right questions are selected to give you an accurate online quote.
Just as with standard cover, the make, model, engine size and security features of the vehicle/s will affect the cost of the policy – for example, a fleet of Toyotas may be much cheaper to insure than a fleet of BMWs. These are important factors to consider before choosing the vehicle, as is where the vehicle will be kept overnight. You could also agree a mileage limit with your insurers as statistically speaking, the more you are on the road, the more likely you are to make a claim. With insurance premiums rising and costs an area we are all battling to keep low, a wise decision about the type of vehicle purchased and the amount it is used could result in long term financial benefits.
If you are only going to need to use your vehicle occasionally for business purposes then it might be more frugal to add ‘business use’ to your existing standard cover rather than purchase a separate business car insurance.