Everything You Need To Know About Company Car Insurance

If you have any car, you need insurance. If you own a business with a car, your necessity for a robust, company car insurance policy is critical. With health and safety liability stretching to the farthest reaches of every organisation, it is not just the Board of Directors, CEO, or even the site manager culpable for workplace accidents anymore.

Company vehicles are an extension of the workplace and being insured at all angles may just save you a lot of headache or even from total devastation. No one wants to see their legacy obliterated by someone else accidentally losing control. Obviously, that would be very dire circumstances, but not impossible, so why not take control now and ensure the business apocalypse doesn’t annihilate your career or ruin your company?

Glossary of Terminology.

indemnity: protection from liability or penalty, loss or damage, or compensation for sustained 

damages or losses

excess: a set amount to be paid by the insured before the insurer will pay out for any costs

premiums: the agreed costs/payments for an insurance policy

no claims bonus – a.k.a. the insurance catch-22: a discounted premium for not making any 

insurance claims

depreciation: when an insured item loses value over time, and payout cost will be less than 

insured amount

nullify: to render the policy legally void, and therefore no coverage will be awarded

classes of use: categorises how you will utilise your vehicle: a. domestic, social, and for pleasure; 

b. commuting; c. business; d. commercial travel

GAP: guaranteed asset protection

Policies. Policies. Policies.

You say it three times and it sounds ridiculous as any other word would. But don’t let it lose all meaning for you, because the policy you have, will be your saviour if you choose it well. There is no one standard and no one premium policy to govern your decision. You will have to be discriminate, but there are some guidelines to assist you along the way.

Standard Business Car Insurance

What is the standard? Find this out and improve on it. A standard individual car insurance policy will include any personal or social use of your vehicle and will include commuting to and from work. This is the minimum individual policy you can have to put your car out on the road legally and safely.

It starts with third-party insurance. This level of policy is the most basic and minimum tier you can have by law. It will not cover you or your vehicle in an accident, only other people, their vehicles and property you damage. So, unless you have an old clunker, consider a higher-tiered plan as a safer, smarter choice.

The main thing to understand is that you might end up paying more for your third-party plan than you would to take out a comprehensive policy just for your premiums, not even considering if you actually have an accident. It is crucial to price several competitors to find what is best for you.

What information will you need to have ready so that you don’t get grilled by the insurance broker?

What is the primary purpose of the car? — What do you do on your average day?

What class of use category is your car?

Will you use it for work? — What is the scope of your role, what is expected of you, and 

the type of services your business offers?

What will you use the car for at work?

How often do you use the vehicle, and what’s the amount of time spent in the car?

Accumulation of personal/work miles on average per year?

How many drivers will have access to and drive the car?

Protection Coverage.

What if you have to use your own personal vehicle for work? You need to have business car insurance coverage. Any use of your vehicle for your company’s pleasure, their prerogative, is work use. If you don’t want to be stuck with the higher business premium costs, but you have an accident while running work-errands your personal policy may not pay out. Think of it like this, if you don’t have it and then need it, it’s too late for you.

Three general categories are:  

Individual-driver for a company-use vehicle with one driver only.

All-driver for a company-use vehicle with multiple drivers.

Commercial travelling for those ‘life-on-the-road’ employees.

But why do you really need to pay for company car insurance? Considering the fact that work vehicles drive in excess of double the miles and therefore business cars are out on the road more often and for a longer amount of time. This increased time on the roads creates more opportunity for risk of being in or causing accidents on the roads. 

A personal car insurance policy will be nullified if your car is in a work-related accident. The insurance company will not pay out, which is tantamount to being uninsured, but you’ve been paying insurance premiums.

Do you like giving away free money to insurance companies? No? Get a business car insurance plan if you:

Run business errands throughout work hours

Travel to and from business meetings 

Transport clients and/or colleagues around

Have to travel between office premises and business sites

Make deliveries or collections, e.g. mail run, morning tea/coffee

Allow other colleagues, employees, or clients/associates to use your car.

Premium Business Car Insurance

Third-party + fire and theft is the second tier of individual insurance coverage, and will only be a good option if you live and work in a high-crime or -risk area, and your car’s worth is that of your policy’s set excess.

Comprehensive covers you for repairs, accidental damages, vandalism, acts of God, etc. Comprehensive coverage is the top-shelf policy for an individual. You will need to check that it covers modifications and contents in your car.  There are also tonnes of extras to look into, e.g. courtesy vehicles and windshield maintenance, and you will need to add on a business premium to your individual comprehensive plan to cover your work-use component.

Comprehensive business covers business car insurance classes 2 and 3, which entails class 1 coverage plus naming of additional drivers who are part of the same business as the policy holder. Class 3 also covers deliveries, selling of goods, unlimited long-distance travel within set or unset destinations, commercial-use only vehicles.

You will have to add commercial insurance to your comprehensive business coverage if you are in the business of driving mini-cabs, private hire, and conducting driving lessons in your vehicle, as these factors require specialised insurance.

Premium Coverage. Good Deals.

There are so many insurance companies, brokers, policy add-ons, and offers to reel you in. But know the difference between the premium bait and what just smells fishy. Whatever the deal, to catch you, the bait has to be cost-effective and it has to be coverage-efficient.

Shop around for several quotes and let the brokers know you are shopping. Strike a deal and barter for better coverage at a better price. If one broker won’t deal, another will. There is always flexibility and room for movement on the premium. 

Bear in mind that the cost of premiums will be directly affected by the type of vehicle and aspects such as its specs, economy, security alarm, etc. You may not be able to help if you have a high-risk career, but it will pay dividends to envisage the smartest makes, models, and features for your business in terms of all costs, including your insurance, when you choose your car/fleet vehicles.

Some tips for keeping business car insurance premiums low: 

Full disclosure of use. This will not only show your insurer how you use your car but how 

much you use it

Revalue your car with the insurance provider periodically. You might be paying too much, 

as your car depreciates over time

Having a good security system in your car

Modifications might increase your premiums. Ask yourself, do you really need 19in chrome 

rims, NOS kit, and hydraulics?

The make, model and some variants of vehicle are pricey to insure, e.g. value, size, type, 


Is it an imported car?

Having a secure parking place at home as well as at work

Whatever is less expensive and less risk to pay out for will only help your cause.

Choice. Choosing Well.

What features are included in a good policy? Basically anything you know you need or want. Features your policy should/could cover to make your life safer:

Windscreen repair/replacement

Car contents— all personal belongings, including child car seat

Key loss or theft

Protection of no claims bonus

Breakdown assistance

Car rescue/removal

All repairs

Repairs courtesy car

New car replacement (e.g. 60% of listed price within 12 months of new purchase)

Total-loss courtesy car

Hotel expenses

Stereo and satellite navigation unit  repair/replacement

Transportation from accident site 

24-hour helpline

Legal expenses

Upgraded courtesy car (for families or specialised needs)

Driving abroad — same-level coverage as resident country when driving car abroad.

Of course, there will be fluctuation of coverage levels and values with each policy component, so make sure you are happy with what the policy offers in the fine print, e.g. market value replacements, long-term guarantee on repairs/replacements, and choice of add-on features for your policy as needed, etc.

And remember, if your car is purchased on finance, take out GAP insurance, so that you are not burned by any potential exorbitant replacement costs in addition to your normal car payments when a financed car is written off.

In Conclusion

Company car insurance is a must-have for any business-use vehicle, even if you personally use it and own it. Not having business coverage is, in effect, being uninsured, and you might be surprised by what counts as a business car for insurance purposes. Don’t be a victim of a nullified insurance policy and be found liable for costly damages you may not have even caused. The risk is too high.

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