Business car insurance
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What is business car insurance?
Business car insurance is a type of motor insurance that covers you for any driving you do as part of your job. It also insures you when you’re driving for social reasons or commuting to and from your workplace. A standard car insurance policy won’t cover you for any work-related driving other than basic commuting.
Do I need business car insurance?
Standard car insurance policies cover you for travelling to a single place of work. But if your job means you need to drive between several sites in the course of your work, you’ll need some form of business car insurance. And if your job involves you driving your vehicle to visit clients or attend off-site meetings and conferences, business car insurance is a must.
What does business car insurance cover?
Business car insurance will cover you in the following situations:
- Driving to meetings with clients or colleagues, or to sales conferences and training courses.
- Driving to multiple work sites if your job requires you to move between locations.
- Carrying out errands for your business or employer – this might include taking money to the bank, but does not cover client deliveries.
- Taking colleagues or customers from one work site to another.
What isn’t covered?
But it won’t apply in certain situations:
- If you’re using your vehicle as a taxi – in this case, you’ll need specialist taxi insurance.
- If you’re making deliveries to customers. If you’re working as a courier, this is likely to require hire-and-reward insurance.
- If you’re driving a pick-up style 4x4. This kind of vehicle can be classed as a commercial vehicle and you may need commercial van insurance.
- If you’re needed to drive customers’ cars. If this is the case, you’ll need motor trade insurance.
- If you’re working as a driving instructor. Again, you’ll need specialist insurance for this.
Commuting to multiple sites, but not really using your car for any other work driving? Then click ‘business use by you’ when getting a quote.
On the road a fair bit more than this for work? Then you’ll need commercial travelling car insurance. Simply select the one you need, and we’ll do the rest to find you competitive quotes from some of the best insurers in the UK.
What type of business car insurance do I need?
There are three main types of business or commercial car insurance.
Class 1 applies to ‘light’ business driving:
If you need to drive between work sites.
- If you occasionally attend work conferences, meetings or training days.
- It also applies if you use your car to carry out the odd errand for your business.
- If you need Class 1 cover, select ‘business use for you’ when you’re getting a quote.
Class 2 is the same as Class 1 business car insurance but it allows you to add a named driver, who will be covered for the same activities. The named driver will also be insured for non-business driving such as social use and normal commuting.
When you are applying for a quote, select ‘business use for you’ and then choose ‘yes’ when you’re asked if you want to add a named driver.
Class 3 is the type of business car insurance you need if you use your car extensively for work. For example, this is the option to choose if you use your car to earn your living – as a health visitor, mobile hairdresser or door-to-door sales person, say. When you’re getting a quote, select ‘commercial travelling’ if this is the type of cover you need.
If you use your car as your business such as taxi driver or for deliveries, you'll need specific insurance, see taxi driver insurance or courier insurance.
How much is business car insurance?
A typical annual business car insurance policy costs £627*, according to recent data. This is cheaper than the average standard car insurance price of £834**, but there are some possible reasons for this:
- Drivers who take out business car insurance tend to be older, which helps reduce average costs.
- Fewer people in general buy business car insurance so overall claims levels are low.
However, there’s still a chance you’ll find that business car insurance is more expensive than a normal policy that just applies to social use and commuting. This is because:
You’re likely to be leaving your car for periods in several different places if you are travelling between multiple work sites.
You’re probably spending more time on the road, so the risk of accidents increases.
You’re likely to be driving more on roads that are unfamiliar to you, again raising accident risk.
In particular, if you need Class 3 business car insurance – cover for commercial travelling – costs may well be considerably higher. Our data shows these policies cost £1,886** a year on average. The higher price reflects the fact that drivers spend much longer on the road.
*Confused.com data Q4 2024.
**Confused.com price index data Q4 2024.
Car insurance for different needs
We don't just compare standard car insurance, we also offer cover for different situations.
Temporary car insurance provides flexibility and convenience for short-term needs. It's ideal for situations like borrowing a friend's car, driving a new car home from the dealership, or taking a test drive.
Black box policies use a telematics device or app to monitor driving behaviour, offering lower prices for safe drivers. Suited to young or inexperienced drivers.
Covers multiple cars under one policy, making it easier if you have more than one car in a household. Multicar providers offer discounts for each car added to the policy.
Specialised cover for vintage or classic cars, based on their unique value and usage, instead of standard market value.
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How can I get a cheaper quote?
There are a number of steps you can take to ensure you’re not paying over the odds for your business car insurance. These include:
- Choosing fully comprehensive cover: comprehensive car insurance can be cheaper than third-party cover. This is because, in the past, higher-risk drivers have tended to buy third-party insurance due to its perceived cheapness, resulting in higher claims rates.
- Giving an accurate mileage figure: Insurance costs are based on the distance driven each year, among other factors. Make sure your annual mileage figure on your application is accurate to ensure you get the right price.
- Paying annually: Paying for your insurance up front in a single lump sum is usually cheaper than paying monthly by direct debit.
- Increasing your voluntary excess: If you agree to shoulder more of the cost of any claim, you can cut the price of cover.
- Parking securely: Leaving your vehicle in a secure location such as a driveway or garage every night should lead to lower premiums.
- Protecting your no-claims bonus (NCB): By paying extra to protect your NCB, your years of NCB will still be counted following a claim.
- Installing security devices in your car: Making your vehicle harder to steal should lead to lower costs.
- Comparing quotes with us: Using Uswitch to shop around for the best quote is a great way to ensure you’re paying no more than you have to.
FAQs
Can I add business cover to my existing car insurance policy?
You might be able to, but you are likely to face an extra charge to do so. Another option is to cancel your current policy and search for quotes for a new one. Bear in mind, though, that your insurer might impose a cancellation fee – so check this before taking action.
What if I only do business driving from time to time?
If you only drive for work occasionally or as a one-off and don’t want to take out a business car insurance policy, an alternative is to take out a temporary car insurance policy with business cover included. This could work out as more expensive, so check and compare quotes.
What if I have a company car?
In most cases, insurance on a company car is covered by a policy taken out by your employer. This typically applies to a fleet of vehicles. But it’s vital to make sure this is actually the case.
Who pays for my business car insurance?
Some companies may cover the cost of their employees' business car insurance, but there are no hard and fast rules.
Will it cover me for social use?
Yes, all business car insurance policies provide cover for you when you are driving for social or non-business reasons.
Does commuting count as business use?
If you commute to a single place of work, this is covered in a normal, non-business policy. But you need business car insurance if your job requires you to travel between multiple work sites.
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