Business Car Insurance
Most standard car insurance policies cover your car for personal use only, meaning everyday driving and commuting, but not for business use. If you need insurance for a car you use for business purposes, you need to make sure you get the right insurance to keep you covered. And that means business car insurance.
In this handy guide, we will look at what business car insurance is, why you might need it, and what’s typically included in a business car insurance policy.
What is business car insurance?
Business car insurance covers cars used for work. That can include making deliveries, driving between offices during the work day, and visiting clients or worksites.
Business insurance for your car usually covers heavier everyday use of your vehicle, such as more miles driven per year or covering a greater distance travelled. This also means that it often costs more than standard motor insurance, as business car insurance is seen as riskier.
When it comes to car insurance, your overall options are:
- Social use only: Which covers you for everyday personal driving.
- Social and commuting: Covering you for everyday personal driving, plus your commute to your place of work.
- Business car insurance: Covers you for work-related driving.
Do I need business car insurance?
If you drive your car for any kind of work use – other than commuting between your home and your place of work – then you will need business insurance for your car.
If you don’t have business insurance and you’re involved in an accident whilst driving for work, you won’t be able to make a claim on your standard car insurance. This means you could be left facing a hefty bill.
If you give false information to your car insurance provider – like not letting them know you’ll be using your car for work driving – it could invalidate your insurance policy. As standard car insurance won’t cover you for work driving, you could also be committing a criminal offence by driving without proper insurance.
What is covered by business car insurance?
Business car insurance generally covers a wider range of driving types than regular motor insurance, with a focus on driving during the working day. You should always check the details of any policy carefully to make sure that it covers your driving needs. Business motor insurance typically covers:
- Transporting goods, materials or equipment
- Visiting clients
- Driving to off-site meetings
- Driving other employees for work tasks
- Driving to training, conferences or exhibitions
- Travelling between sites or offices
- Visiting other businesses for work reasons, including visiting the post office or the bank for your business
- Buying a company car for your business
What isn’t covered by business car insurance?
There are some instances of business driving that won’t be covered by business car insurance, including:
- Working as a taxi driver
- Working as a driving instructor
- Working as a courier or delivery driver
- Driving a van for work – you’ll need business van insurance rather than business car insurance
What’s the difference between business and commercial car insurance?
Although they might sound similar, business car insurance and commercial car insurance are different types of insurance that cover different driving uses.
- Commercial car insurance covers driving when it’s an integral part of a job, such as driving a taxi, working as a delivery driver or as a driving instructor.
- Business car insurance covers driving when working, but where driving isn’t an integral part of the job.
What are the different classes of business car insurance
Business car insurance is usually offered in a number of different classes, each providing a different level of cover. Every policy is different, so you should always check the details carefully to make sure you get the cover you need. The different classes typically cover:
- Class 1 – This is the standard level of cover, designed for driving between different workplaces or addresses, such as visiting clients or patients.
- Class 2 – This level of cover includes everything in class 1 but also provides for an extra driver. This can be useful if you share driving duties with someone else in your business. Most policies require you and the named driver to be part of the same company to qualify.
- Class 3 - This class is best for long-distance driving as part of your business, such as a salesperson, for example. However, this still usually doesn’t cover commercial deliveries. This level of insurance is usually specifically designed to cover the increased risk of high mileage motoring.
How much does business car insurance cost?
The cost of any business car insurance policy will vary by company and policy type and will also depend on your own unique circumstances. The following can all influence the cost of car insurance for business driving:
- The class of business insurance you want
- What your job is and what you’ll be using the car for
- How many miles you estimate you’ll drive
- When and where you’ll be driving – location and time of day can affect the risk level for insurers
- The make, model and insurance group of your car
- Your age, driving history and your no-claims discount
- The age and driving history of any other named drivers you want to add to the policy
- Where you live
- How secure your car will be kept – secure off-road parking will be seen as less risky than parking your car at night on the side of the road
How can I save money on my business car insurance?
You can find a deal on business car insurance by:
- Driving a car in a lower insurance group, as they’re typically cheaper to cover
- Parking your car in a safe and secure manner, ideally off-road in a locked garage
- Installing security devices in your car
- Trying to keep your annual mileage as low as possible
- Paying your car insurance annually rather than by monthly instalments
- Opting for a black box or telematics policy that rewards good driving with lower premiums
- Offering to pay a higher voluntary excess
- Building up your no-claims bonus
- Shopping around to find the cheapest car insurance deal possible – including comparing car insurance quotes with Asda Money. The car insurance comparison service is provided by Vast Visibility Limited.
It’s important to always make sure your business motor insurance policy provides the cover you need. Don’t be tempted to lower the price you pay by purchasing a policy that doesn’t cover you adequately.
What info do I need to provide to get business car insurance?
You can get an online quote for business car insurance from the top UK insurance providers with Asda Money. To get a quote, you’ll need some information at hand, including:
- Information about your car: Its make, model and registration. Plus the estimated value and when you bought it.
- Your personal information: Your name, date of birth, occupation and driving licence number (provisional driving licence at least). You’ll need the same for any other named drivers.
- Information on any past accidents and convictions: Details of any recent accidents, driving offences or unspent convictions for you and any other named drivers.
Business Car Insurance FAQs:
- Does business car insurance cost more?
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Business car insurance is typically more expensive than private car insurance, as it’s seen as a higher risk than social driving. This is because business driving usually involves spending more time driving, often at peak hours.
- Who pays for business car insurance?
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If you’re self-employed, you’ll have to pay for your business car insurance yourself. If you’re not self-employed, your employer may pay all of your insurance policy. Or they may pay the additional cost above private car insurance. Or they may make a contribution towards the miles you drive during work.
- Can I insure a company car personally?
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If your company car is owned or leased with your name as the policyholder, then you’ll need to insure your company car yourself. If the company car is owned or leased by your employer, then your employer should insure the car on your behalf.
- Does commuting count as business use?
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For business car insurance, commuting isn’t considered business driving. Business car insurance is only required for driving whilst doing your job, such as driving to see clients or driving between work locations during the working day.
- Can I refuse to use my personal car for work in the UK?
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Refuse is a strong word. An employer may ask you to use your personal car for work, and in many professions this is typical. If you’re starting a new job, talk to your employer up-front about both of your expectations around driving.
- What is a Class 1 business car insurance?
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Class 1 business car insurance is the standard level of insurance for business driving. It covers trips between multiple places of work or visits to clients and customers, such as travelling between different offices or a care worker visiting patients. Class 1 business car insurance won’t cover you for deliveries or door-to-door sales though.
- Do I need business car insurance if I have a company car?
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Most likely not. Your employer or the leasing company usually insures your company car but you’ll need to check to make sure. If you can’t use your company car for any reason – if work is being done on it for example – you’ll need business insurance if you want to drive your personal car for your job.
- Can I add a named driver to my business car insurance?
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Many business car insurance policies allow you to add named drivers when you buy the policy. If you want to add a driver to an existing insurance policy, you'll need to contact your insurer to see if that’s possible. Be aware that adding drivers to your policy will likely affect the price you pay for it.
- What extras are available for business car insurance?
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Each insurance policy will differ, but many business car insurance contracts will give you the option to add insurance extras including:
- Personal accident cover that pays out if you’re injured or killed in a road accident
- Breakdown and roadside assistance cover
- Legal cover for any legal costs related to a claim by you or a third party
- Courtesy car cover, providing a replacement car whilst yours is out of action
- Windscreen cover for cracked or shattered windscreens
- Replacement key cover
- Wrong fuel cover, in case the wrong type of fuel is accidentally put into the car’s tank
- What's the difference between sole trader and company car insurance?
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Company car insurance is appropriate for cars that are owned by a company you work for, or that are leased from another company. If you’re a sole trader, company car insurance won’t be right for you as your business is essentially you. You’ll need business car insurance for your vehicle if you use it for your job.
- Is it cheaper to add business use to my normal car insurance or buy a separate business policy?
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This will depend upon the specifics of your situation, including how often you drive your car for business and what kind of work you use it for.
If you use your car regularly for work, then business insurance may be the option that gives you the required cover. If you use your car semi-regularly for work, such as one or two days a week, it may be cheaper to add business use to your existing policy.
- Is fleet insurance the same as business car insurance?
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Although both business car insurance and fleet insurance are used to insure vehicles used for business, they’re two different kinds of insurance.
Fleet insurance is intended to cover a large number of vehicles under one policy, even up to the hundreds. Fleet insurance can also cover a wide range of business uses, including delivery driving. Business car insurance is intended to insure one or a few cars under one policy. It won’t cover vehicles for delivery driving.
- Will my standard policy NCD be affected if I claim on business car insurance?
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You have to disclose any claims made to your standard insurance provider, even if those claims are made on a different policy like a business car insurance policy. This won’t affect your no claims discount, but it could affect your premium.
- Can I get temporary business car insurance?
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Yes you can, although it’s not something we offer currently. However, you can look elsewhere to take out temporary business car insurance on an hourly, weekly or monthly basis, depending on how long you need business cover.
ASDA Money is a trading name of Asda Financial Services Ltd and Asda Stores Ltd which for general insurance are Introducer Appointed Representatives of Vast Visibility Limited, 8 Princes Parade, Liverpool, L3 1DL, authorised and regulated by the Financial Conduct Authority. Firm reference number 566973. You can check these details on the FCA Register.
The ASDA car comparison service is arranged by and administered by Vast Visibility Limited.