If a car is used for business by yourself or other employees, then a business policy is mandatory.
A private car policy will not cover you for business use. Some private policies will include commuting cover, but this is only to and from a single, regular place of work, which is sufficient for most people who work in the same location every day. If you use a car for any business purpose other than this, then a private policy will not cover you and you are technically driving around uninsured. Even if it’s just dropping off a business letter on the way home, this is business use and falls outside commuting, so should an incident occur, it could be costly to you personally, and result in points on your licence and higher insurance costs.
Additionally, if an employee of yours is driving without proper business use car insurance and has an accident, there could be serious consequences for your company. Employers have a legal responsibility to ensure the safety and wellbeing of their employees at work or on work business, which extends to car travel. In certain circumstances, a company can also be held liable for the actions of its employees, so it makes sense to ensure you are covered properly in case your employee or a third party ends up being injured.
There are several different types of policy for business insurance use to cover the different types of trade or use the vehicle will be put to. Most insurers use the following classifications, with minor differences.
Business insurance for Cars – Class 1
When drivers own the vehicle they will be using for business, this is the cover required. It normally includes social, domestic and pleasure use, and can be extended to include a husband or wife too.
Business Car Insurance Class 2
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 Car Insurance Class 3
This is sometimes known as “commercial travelling”, where travelling is part of the driver’s occupation. Sales reps fall into this category as they will travel to their own and other people’s premises for work purposes. The cover is not designed for companies that transport passengers or goods for payment.
Hire and Reward
Hire and reward policies are necessary when transportation is the main purpose of a business. So couriers and hauliers need this form of insurance. Taxi insurance is also a form of hire and reward cover.
So for any business use apart from commuting, then a proper business car insurance policy is required by law.
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