Company Car Insurance

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Company Car Insurance

Business Car Insurance is different to insurance for cars which are used for personal projects like the weekly shop or picking up the kids from school because they’ve often got multiple people insured on them and are specifically for business tasks such as delivering or collecting goods or people.

Why is Business Car Insurance Required?

The government taxes us depending on our behaviour and we can receive a lower rate of tax on business vehicles than on our regular leisure vehicles because we are using them, in effect, to make a profit for ourselves or our employers.

Company cars are a type of business car which is usually loaned to a person as a fringe benefit of their employment so that they can perform the acts for which they are employed, whether that’s attending long distance meetings, travelling between clients, delivering or collecting goods or any number of other tasks.

Business cars, in turn, have different requirements to regular vehicles when it comes to their uses. Some small businesses use business cars for internal purposes and some businesses, such as taxi ranks and limousine companies use whole fleets of vehicles up to 24 hours a day.

What Does Business Car Insurance Cover?

Ordinary family-style cars, limousines, taxis, refrigerated vans and lorries -including ice cream vans – tippers, flatbed vans and pick-up trucks are all just some of the vehicles which might be used by businesses and, therefore, qualify for business car insurance.

Most business car insurance plans cover a high number of different eventualities because realistically a business car is likely to be used more frequently than a car intended for personal use and it is, therefore, exposed to more risk. Often policies include up to £20 million for damage to property which has arisen from an accident or several accidents and up to £5 million for any costs incurred by third party claimants.

As business drivers often listen to the radio for hours at a time on long journeys, you may find that a policy has unlimited cover for audio equipment which is permanently fitted to the inside of the vehicle and because the windscreen is often the first part of a car to need repairs, unlimited windscreen cover might also apply.

Some policies offer up to £100 for personal belongings which are left inside the vehicle (but kept out of sight in the case of robbery) and whole vehicle replacements can also be sometimes issued. Special vehicles such as fork lift trucks, tractors and diggers can also occasionally be covered by business car insurance, but it’s a complicated area and there are some disagreements regarding vehicles for building and agricultural uses.

Replacement Vehicles

If a business car is taken in for repairs then the needs of the business owner don’t just go away, so all good policies have a replacement vehicle sent out while the damaged car is in the garage for repairs. Most insurance policy makers also realise that business cars are likely to travel abroad, so up to 30 days cover in European countries is often also included in business car insurance plans. In the event of accident some plans also pay for a proportion of the passenger and driver’s medical expenses.

Business Car Insurance Benefits

Business car insurance on a vehicle used for business purposes is a legal requirement in the UK. There are no ifs or buts, all vehicles must be insured by law and because of the nature of the use of a business vehicle it needs a higher level of insurance than an ordinary car. However, some tax benefits on petrol and other costs associated with running a business car more than make up for the slightly more expensive insurance premiums.

The obvious benefits to having business insurance is that the cover is far more comprehensive for a business vehicle than a personal car, so you could find that if you suffer a crash while in your business car you are entitled to more financial aid than you would be in the car you use to do your shopping.

Policies vary widely and going for the cheapest option isn’t always the best. Make sure that you read all the fine print when choosing a policy and that you’re covered for issues which suit the use of your vehicle. If for example you regularly visit France, make sure that you’re covered whilst you’re there or if you carry a large amount of valuable goods in your vehicle ensure that the cover you buy reflects the true value of those goods just as you would when buying home insurance.