A business car policy is required for anyone using their car for business
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.
An employer also has to be aware that there could also be comeback from an incident involving an employee. Under Health and Safety Law, an employer is responsible for their employee's welfare whilst at work. This still applies in a vehicle if they are on work business. On top of this, in certain circumstances, an employer is also liable for an employee's actions, so if a third party is injured badly in an accident involving an employee the company may be held partly responsible too, so proper business use insurance is a necessity.
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
This cover is similar to class 1 in that it covers a policyholder's vehicle for business use, but doesn't necessarily cover any personal use. In the case of class 2 cover, the policyholder is usually the company itself, wanting to cover pool cars or other vehicles the company owns. Social, domestic and pleasure use can usually be added to these policies if required, but it is worth noting that if this is not included, then the car can only be used strictly for business use, so borrowing it to pop out to post a personal letter or some such private errand will not be covered.
Business Car Insurance Class 3
Also known as "commercial travelling", this class of insurance will cover driving when it is part of the driver's job, for example, sales reps. It shouldn't be confused with jobs where passengers or goods are transported, as this is hire and reward.
Insurance for 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 for any business use apart from commuting, then a proper business car insurance policy is required by law.
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.
An employer also has to be aware that there could also be comeback from an incident involving an employee. Under Health and Safety Law, an employer is responsible for their employee's welfare whilst at work. This still applies in a vehicle if they are on work business. On top of this, in certain circumstances, an employer is also liable for an employee's actions, so if a third party is injured badly in an accident involving an employee the company may be held partly responsible too, so proper business use insurance is a necessity.
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
This cover is similar to class 1 in that it covers a policyholder's vehicle for business use, but doesn't necessarily cover any personal use. In the case of class 2 cover, the policyholder is usually the company itself, wanting to cover pool cars or other vehicles the company owns. Social, domestic and pleasure use can usually be added to these policies if required, but it is worth noting that if this is not included, then the car can only be used strictly for business use, so borrowing it to pop out to post a personal letter or some such private errand will not be covered.
Business Car Insurance Class 3
Also known as "commercial travelling", this class of insurance will cover driving when it is part of the driver's job, for example, sales reps. It shouldn't be confused with jobs where passengers or goods are transported, as this is hire and reward.
Insurance for 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 for any business use apart from commuting, then a proper business car insurance policy is required by law.
About the Author:
M Withers is Commercial Manager at Coversure who offer all classes of business car insurance quotes including haulage insurance.
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