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Insuring Your Vehicle for Business Use

Car with case

Many people use their own vehicle or a work vehicle during the course of their employment. It is even more important to have comprehensive car insurance on a  vehicle being used for business than a private car as it is most likely used to secure income for the business. When looking for quotes for business use vehicles you will probably have to look at a few things:

  • What type of vehicle is it?  
  • What is its primary use?
  • How many drivers use it?  
  • What type of damage is likely to occur?

Most vehicles used in the course of a business can get a bit more banged up than private cars just because they are being used more frequently. A good example is a  vehicle being  used everyday for meetings and appointments  by a  regional sales representative . The constant stopping and starting and long haul mileage means they have to be fixed quite often and also have an increased chance of being in an accident.

What is business use?

Business use means a car that is used for social domestic and pleasure purposes, being driven between your home and place of work and in the course of the business. Examples can include company cars, trucks as well as multi-purpose vehicles. There will be cases (especially in small to medium businesses) that there is some cross over between private use and business use. You need to be especially careful with this and be sure to ask your insurer how this could affect you. Insurers have different definitions of what commercial, business and private use is, refer to your insurers Product Disclosure Statement to find out what’s what.

What can happen  with a car being used for business ?

A car being used for business is probably on the road a lot more than a private car that is only used from getting to a job and then back again. Purely because business vehicles are usually on the road more and in busier times means that they are more likely to be involved in a road accident.

A  vehicle being used for business can also see a lot more kilometres than a private car, so it is likely to have more mechanical faults. Tyres can wear out more quickly and present a danger to the driver and others on the roads. Brakes will also be used more and wear down more quickly so they have to be maintained to the highest order.

Maintaining your car for business use

Regular maintenance on a vehicle being used for business must be performed because a business has to rely on it to do its task. Downtime caused by a broken down vehicle can cost a business a lot especially if you are paying a driver while it is sitting at the side of the road. The best thing to do is to have a vehicle maintenance schedule so you are catching small problems before they become major ones.

Insuring Multiple Drivers

Most businesses will have more than one driver using a vehicle and it is likely that new employees will have to use it as well. It is vital to keep your insurance up to date and not have any new employees drive without being added to the insurance. If you do not update your insurance, you may find you have ‘unlisted driver excesses’ payable if involved in an incident, these excesses can vary between insurance companies, check your policy schedule to find out how much it is.