What is business van insurance?

Business van insurance – sometimes called commercial van insurance – is a kind of vehicle insurance for vans that are used for commercial purposes.

It’s a legal necessity for anyone driving an LCV (Light Commercial Vehicle) for business purposes, including commuting to work. An LCV is classed as anything that weighs up to 3.5 tonnes, whereas a vehicle over that weight is regarded as an HGV (or Heavy Goods Vehicle) which will need another kind of insurance altogether.

Types of business van insurance

You can get three different types of business van insurance, each corresponding to different business needs:

Carriage of goods for hire or reward – You’ll need this business van insurance if you use your van for transporting items, equipment or goods for sale to clients, making it ideal for couriers driving vans or delivery drivers.

Haulage – Similar to the carriage for goods policy above, haulage van insurance is for transporting those same goods, but over a long distance. The specifics of this kind of policy vary from provider to provider so be sure to research your options before you buy.

Carriage of own goods – For those who use their van to transport their own tools and equipment for work. This insurance is designed for contractors and tradespeople like electricians or builders who need to take their tools to every work site and job. It will also be suitable for professionals like personal trainers and home massage therapists who drive vans.

Do I need commercial van insurance?

Legally, you need to have van insurance to drive a van or pickup on the road in the UK. Van insurance will cover you for any accidents or harm you cause if you have an accident.

If you’re self-employed or a business owner, and you use your van for your work, then you’ll need business insurance for your van. This includes commuting in your van or if you only use it occasionally for work. If you mostly use your van for personal reasons – like shopping, doing the school run or for carrying items for hobbies – but you also use your van for commercial purposes, business van insurance will also cover you for these private uses.

If you use your van only for private and social uses and never for work, then you’ll need to buy a private ‘social only’ van insurance policy.

Does commuting count as business use?

If you commute to your place of work in your van – even if you don’t otherwise use your van for work – this is counted as business use, and you should insure your van with commercial van insurance.

What does business van insurance cover?

Business van insurance is designed to cover you and your van in case anything goes wrong. The specifics of exactly what’s covered by a policy will be outlined in the policy documents. You should carefully read these before making your decision on which provider and policy to go with, as a cheap business van insurance policy may not offer you the cover you need.

Although business insurance for vans does vary, most policies cover:

• Damage to your van, or the loss of your van, due to a road accident
• Damage to your van, or the loss of your van, due to theft, vandalism or fire
• Damage or the loss of a third-party’s vehicle or possessions due to a road accident
• Damage to a passenger’s possessions that were in your van at the time of a road accident
• Medical fees for you or any passengers in your van after a road accident
• Legal fees in case a claim is brought against you after an accident
• Any optional extras you choose, like breakdown cover

The level of cover provided by your insurance will vary by policy, but will also depend upon the type of commercial van insurance you buy. There are three main types available:

• Third party only van insurance – The minimum legally required level of insurance. Third party policies cover you for any damage or harm you cause to a third-party (someone other than yourself), including damage to their vehicle and possessions, as well as any medical costs. Third party only insurance won’t cover your own van, possessions or medical costs.
• Third party fire and theft van insurance – This level of insurance offers you the same as above, but adds cover for any losses caused by fire damage or theft of your own van.
• Comprehensive van insurance – Comprehensive insurance covers all of the above, plus any costs for repairing or replacing your van or possessions, as well as any medical costs you incur, even if the accident was your fault.

Can anybody drive a van with business insurance?

This will depend on the specifics of the van insurance. Some commercial van insurance policies only cover a single named driver, whilst others allow additional named drivers to be added to a policy. The latter can be useful when a business needs a van to be available to multiple employees.

Some business van insurance providers also offer ‘any driver’ policies, meaning anyone with a valid license can drive the van. But there will still be conditions, like any driver must have a valid driving license and may have to be over a certain age – sometimes 25 or over.

How much does business van insurance cost?

Business van insurance is essential for your van and your business, but how much will a policy set you back? The cost of your commercial van insurance policy will depend upon the type of insurance you want, plus your personal circumstances. It will be determined by:

• Your age – Similar to other forms of vehicle insurance, your age – and therefore your experience as a driver – can make a difference. Generally, up to a certain age, the older you are the cheaper your insurance can be.
• Your business – The manner of your business can alter the price you’ll pay for insurance. Some fields of work, and the goods you transport, can see you pay more or less for your insurance.
• The type of insurance – The cost of business van insurance will depend on whether you opt for carriage of own goods, carriage of goods for hire or reward, or haulage insurance policies.
• The level of cover - Van insurance will typically increase in price as you increase your cover from third party, to third party fire and theft, to fully comprehensive.
• The van you drive – Some vans cost more to insure than others. Insurers will use the age, repair history, model and any modifications you’ve made to your van to give you their price for your vehicle’s insurance.
• Your van’s security – Insurers like to see vans that are properly secured and protected from theft, especially when possession cover is part of the policy. Making sure your van has sturdy locks and protective internal fixtures for storage can lower your policy price.
• Where you keep your van – Secure off-street parking can help lower the cost of insurance.
• Any optional extras you add - Optional extras can raise the price of an insurance policy, although they can be a sensible investment.

As a general guide, on average, 50% of customers paid less than £657 for their van insurance in 2023.

Always be sure to carefully research the best business van insurance policy for you, reading up on policy documents to get the full picture before you invest.

What’s the difference between private and business van insurance?

Whereas commercial van insurance is for drivers who use their vans for work, private van insurance – also called social use only van insurance – is for drivers who use their van only for non-work related driving. This could be for shopping trips, transporting dogs, and for general everyday use.

If you use your van for both work and private driving, you’ll need business van insurance, as it’ll cover you for both work and social driving. If you commute in your van to your job – even if you don’t use your van whilst working – you’ll also need business van insurance. Social use only van insurance won’t cover you for commuting.

There are three main types of commercial van insurance to choose from, depending on your specific needs:

• Carriage of own goods
• Goods for hire and reward
• Haulage

What information do I need to get a business van insurance quote?

You can get a business van insurance quote quickly and easily at Asda Money. You’ll need to provide the following information:

• The details of your van, including its registration number
• What you use your van for
• The type of cover you’re looking for: carriage of own goods, carriage of goods for hire or reward, or haulage
• The level of cover you’re looking for: third party, third party fire and theft, or fully comprehensive
• Your estimated annual mileage
• Details about you, and any other named drivers you want to add to the policy

If you’re looking to insure your business van with value-for-money insurance that always goes the distance, be sure to visit our van insurance page to compare cheap van insurance quotes from some the UK’s leading providers. For more tips and guides on vehicle insurance, visit our Asda Money blog here.