Studies have shown that as many as 5 million drivers are risking invalidating their insurance by using their personal cars for business purposes. Many small business owners believe that it is perfectly fine if they use their personal vehicle for business needs other then commuting to and from their usual place of work, but this simply isn’t the case as most private car polices do not cover the driver for business.
The study has shown that each driver on average drives 2,256 miles a year without being properly insured, some of the common, but quite likely uninsured, business journeys include:
- Travel to and from training courses
- Driving to the bank to do the banking for the company
- Driving to another office that isn’t their usual place of work
- Travel to meet clients or suppliers
- Attending company away days
- Transporting stock from one place to another
Part of the problem is that changes in recent years to how company cars are treated in view of tax has seen many employees opting out of the company car schemes and using their own vehicle instead.
Many do not realise that it is possible to extend their car insurance at relatively little cost (if any cost at all) to ensure that they are properly insured no matter what journey they are undertaking. Car insurance is split in to several class types:
Social, Domestic & Pleasure (SD&P)
This class of insurance is the one that is most common, and many drivers use. It insures you to go shopping, collect the children from school, visit friends and family in other parts of the country, and even to go on a motoring holiday (although it is worth checking your policy does cover you abroad before you travel). What SD&P does not cover you for is any commuting, be that driving to the train station on your way to work, driving to your office, or using your car in any way for work.
Social, Domestic, Pleasure & Commuting (SDP&C)
As you would expect, this class of cover allows you to do all the things mentioned above, but in addition will allow you (or anyone else named on your policy) to use the car to get to and from your normal place of work. Note that I say “normal” this class still doesn’t cover you for off-site meetings or training, travel to a branch or office that you don’t normally work at, company away days, or transporting items for the company.
Social, Domestic, & Pleasure including Business Use (SD&PB)
Again, this will allow you to perform all the tasks noted above, but will also allow you to use your vehicle for business purposes above and beyond commuting to your normal place of work.
However, the exact details of what is covered and what isn’t will vary from broker to broker, some business use may be classed as visiting clients/suppliers, business meetings and training, company away days, but not for delivering items. If your vehicle is going to be used in a competition, or as a pace car during a race or rally then again, it is unlikely “standard” business car insurance will cover you.
As with all things business, it is worth comparing a few different quotes, asking around and seeing what your fellow business people would suggest, but you can also approach BIBA (British Insurance Brokers Association) and ask them who they may suggest could help you.