Protect your vehicles, employees and more with cover tailored to your business.
When accidents happen on the job, personal car insurance won’t cover business vehicles, so you might be on the hook for any damages. Commercial car insurance protects any vehicle used for commercial purposes, including fleets, tractors and trucks.
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How does commercial car insurance work?
Commercial car insurance provides many of the same types of cover as personal auto insurance, but often includes much more, like higher third party limits and cover for hired vehicles and employees.
The main factor that separates personal and commercial car insurance is what you’re transporting and why. Designed to protect both businesses and employees, commercial car insurance policies are available in many industries, including the following:
- Real estate
- Car hire companies (limo, taxi, etc.)
- Car dealerships or rental companies
- Restaurants or bakeries
- Wholesaling, distribution and manufacturing
- Delivery companies
- Catering services
- Construction, landscaping and contractors
- Roadside assistance companies
Case study: Food delivery business
Joe, like many pizza delivery drivers, uses his own vehicle for work. His personal car insurance covers him on his commute to work, but cover stops as soon as he clocks in.
If he gets in an accident on the job, damages won’t be covered because the insurance company deems his job as a delivery driver an unapproved use of the car. He could have to pay out of pocket for damages.
Adding a commercial rider or taking out a commercial car insurance policy protects his vehicle while at work.
What kind of commercial cover do I need?
Just like personal car insurance, there are a handful of different types of commercial car insurance cover.
- Collision cover. This covers the cost to repair or replace a vehicle after an accident.
- Comprehensive protection. This provides cover for damage caused by factors other than an accident. This could include weather damage, theft and vandalism.
- Third party. This protects companies and drivers who are considered at fault for damage or injuries caused in an accident.
- Uninsured or underinsured cover. This provides increased cover if another driver harms your vehicle or employee and doesn’t have enough insurance to cover damages.
What additional cover should I consider?
While availability may vary by insurer, location and other factors, these common additional extras can help increase your cover:
- Workers compensation. This will pay for lost wages if one of your employees is unable to work following a car accident.
- Specialised vehicle cover. These policies can cover things like vans, trucks, busses, tractors and other vehicles that aren’t covered under a standard policy.
- Fleet insurance. If you have a rental car company or dealership, this type of cover can protect your inventory or fleet.
- Personal effects cover. This covers personal items if they’re lost when stored in a work vehicle.
- Windscreen repair. This pays for windshield and other glass repairs without you having to pay anything out of pocket.
- Gap insurance. This covers the remaining balance on a vehicle if it’s totalled when you still have an outstanding loan.
- Fellow employee cover. This protects your business from claims if one employee injures another.
- Towing and labour costs cover. This provides roadside assistance and covers the cost of towing and labour if company vehicles break down on the road.
How much does commercial car insurance cost?
The cost of commercial car insurance can vary depending on your choice of provider and many other factors. For example, a simple cargo van for a local caterer or restaurant might cost less than £800 annually to insure, while a cab company or limo service could pay £3,500 to £8,000 per vehicle.
How to get cheap car insurance for business
Reduce your risk in these areas if you can and you’ll reduce your premiums.
- Vehicles. The type of vehicles you drive will have a direct effect on the cost of cover due to factors like the value, usage and cost of repairs.
- Number of vehicles and drivers. The more drivers and vehicles you want to insure, the more you’ll pay for cover.
- Travel distance. Insurance for local pizza delivery restaurants would likely be cheaper than insurance for a coast-to-coast trucking company.
- Cover types. Just like personal car insurance, the types of cover you purchase affect your rates.
- Cover limits. Higher cover limits to pay for more expensive vehicles or cargo will increase the cost of insurance.
- Storage area. Where your vehicles are stored will affect your insurance.
- Location. Accident rates, population density and other factors can vary by location.
- Excess. A higher excess can help reduce your rates.
- Cargo type. If you’re carrying high value or fragile cargo, expect to pay more for insurance.
- Driving history. If you or your employees have poor driving histories or records of multiple claims, you might end up paying more for cover.
How do I compare commercial car insurance?
As with any major financial decision, it’s important to compare your options before deciding which policy is right for you. Consider these factors:
- Exclusions. Ask about any potential exclusions to prevent gaps in cover or denied claims.
- Combine commercial policies. If you’re shopping for other types of commercial insurance, find out if providers offer bundling discounts or umbrella policies.
- Laws and regulations. Make sure that any policy you consider meets the minimum cover requirements.
- Office locations. If you prefer to deal with your provider or agent in person, make sure there’s an office nearby.
- Payment terms. Look for a provider that offers payment terms that meet your business’s needs.
- Additional extras. Not all providers offer all insurance options, so shop around for the best cover.
- Price. Every provider calculates costs differently, meaning pricing for the same cover can vary. Compare quotes to get the best price and consider a provider that specialises in insurance for your industry.
How do I apply for commercial car insurance?
The steps to purchase cover are different with every provider, but purchasing commercial car insurance isn’t too different than personal car insurance.
- Visit your insurer’s official website.
- Click Get a quote or call the phone number provided.
- Submit all necessary information about the vehicles and drivers.
- Adjust cover limits and optional extras.
- Get your quote and confirm details.
- Enter payment information.
- Purchase insurance.
What to watch out for
Commercial car insurance is a great way to protect your employees and vehicles, but there are still a few things to watch out for.
- Exclusions. Like most insurance policies, your commercial car insurance policy may have exclusions. This may include intentional damage, improperly licensed drivers, specific driving activities or areas.
- Car insurance for non-employees and hired vehicles. Unless you purchase the add-on, you might not have cover when driving vehicles not owned by your company.
- Equipment. Some policies may not cover equipment inside or on your vehicles.
- Cargo. Find out if cargo is covered by a standard commercial car insurance policy or if you need additional cargo cover.
- Insurance limits. Limits vary, so make sure your policy meets state and industry minimums.
- Licence status. Ensure that all drivers have the right licence status and that their licence is up to date, otherwise you may be denied cover.
Commercial car insurance is necessary for any business that relies on the use of vehicles for everyday operation. It can protect your vehicles on and off the road and, with the right add-ons, provide additional cover for other essentials for your business.
But just like any other type of insurance, you’ll get the best rates and policy by comparing your options.
Frequently asked questions
*Disclaimer: Please take reasonable care to answer all the questions honestly and to the best of your knowledge. If you don’t answer the questions correctly, your policy may be cancelled, or your claim rejected or not fully paid.
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