Business car insurance

What is business car insurance?

Business car insurance covers you if you use your car for work-related purposes, apart from commuting. It’s often more expensive than standard car insurance because you’re seen as more of a risk to insurance providers. That’s because driving for work can result in you covering more miles at busier times and on unfamiliar roads. This means you’re more likely to make a claim on your insurance.

What does business car insurance cover me for?

Business car insurance can cover you if you use your car to:

  • travel between different sites or offices
  • visit clients on a regular basis
  • drive other employees around on business duties
  • visit customers, for example to deliver samples
  • drive to the bank for work reasons
  • use your car to get to training, conferences or exhibitions

If you drive your car for work purposes and need to make a claim, you’re likely to find your claim rejected if you don’t have business car insurance. You also might find yourself in trouble for driving uninsured.

If you’re driving your car to and from work but not for work, then you’ll just need to make sure your policy covers commuting.

What types of business car insurance are there?

Business car insurance falls into three classes – all three also cover social, domestic and leisure use.

  • Class 1. This covers you for driving between multiple places of work or occasional travel to meet clients. Class 1 insurance typically includes people like care workers who drive to visit patients. It wouldn't cover you for deliveries or door-to-door sales. It may also cover your husband or wife, but check your policy to be sure.
  • Class 2. This offers the same cover as class 1, but includes a named driver. Most insurance providers specify that the policy holder and named driver must work for the same business. As with class 1, deliveries and door-to-door selling aren't covered.
  • Class 3. This could be the right option if you rack up lots of miles as part of your job – for example, if you're a salesman. It covers the delivering of samples, but not commercial merchandise. This is the most expensive insurance class, as high-mileage drivers are considered at greater risk of an accident and more likely to make a claim. But be aware that class 3 won't cover you if you use your car as a taxi or to make deliveries.

Frequently asked questions

What’s the difference between business car insurance and commercial car insurance?

These terms are often used interchangeably, but business car insurance and commercial car insurance aren’t the same thing.

Business car insurance provides cover for business use, other than commuting. Commercial car or vehicle insurance is used for taxis, trucks, driving instructors, delivery vans and business fleets. Like regular vehicle insurance, it offers three levels of cover – third party, third party fire and theft, and comprehensive insurance.

Compare taxi insurance with Compare the Market.

Do I need business car insurance if I have a company car?

You probably won’t need business car insurance if you have a company car. Your employer or the leasing company should provide your company car insurance, but you’ll need to check. If your company car is out of action, for example having its regular service, and you use your own vehicle or your partner’s for work, then you will need business car insurance.

Can I get temporary business car insurance?

Yes, it’s straightforward to get temporary car insurance. You can get cover in under 15 minutes if you suddenly need to use your car for business. And you can get cover for periods ranging for an hour up to 30 days.

But before you get temporary cover, it’s worth checking with your car insurance provider whether you can add temporary business insurance to your policy – some providers offer this as an option. This could be helpful if you’re just going on a short business trip.

How do insurance providers calculate costs for business car insurance?

Providers will look at several things when pricing your policy. These include your mileage, what you’re using your car for, your occupation and how many hours you spend driving for work.

How can I reduce the cost of my business insurance?

There’s a few ways you may be able to cut the cost of your business car insurance:

  • see if increasing your voluntary excess reduces your premium – although always keep it at a level you can afford if you have to make a claim.
  • you might also want to see if improving your car's security affects your premium price.
  • if your business has three or more cars, it might be eligible for fleet insurance. That’s often the cheapest way to insure a group of cars and drivers.
  • paying your premium upfront is often cheaper than paying it in instalments.
  • black box or telematics insurance might also help keep costs down as it can show that you’re driving carefully.
  • shop around – by using a comparison site like Compare the Market, you can easily compare good-value business car insurance that could be ideal for your line of work.

You’ll need to discuss with your employer whether you can be reimbursed for the cost of business car insurance. Some companies do this through their business mileage allowance which covers more than just the cost of fuel per mile. Others might pay insurance and fuel costs based on receipts.

Although business car insurance is usually more expensive than regular car insurance, don’t be tempted to save money by sticking with standard cover. If you do, and you use your car for work, you may invalidate your policy.

How much does business car insurance cost?

average annual premium for policy holder**
average annual premium for policy holder and any named driver***
average annual premium for policy holder and spouse****

**Average premium of £564.27 based on 5 cheapest prices. Based on Compare the Market data for 1 October 2020 to 1 January 2021 for social, domestic, pleasure, commuting (SDPC) and business use for proposer only.

***Average premium of £664.06 based on 5 cheapest prices. Based on Compare the Market data for 1 October 2020 to 1 January 2021 for social, domestic, pleasure, commuting (SDPC) and business use for any named driver.

****Average premium of £410.98 based on 5 cheapest prices. Based on Compare the Market data for 1 October 2020 to 1 January 2021 for social, domestic, pleasure, commuting (SDPC) and business use for proposer and spouse.

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What do I need to get a quote?

Shopping around for cheap business car insurance couldn't be easier. Simply start a quote by telling us about:

  • Your car – you’ll need to have your registration number to buy a policy. But you can get a quote without it if you know your car’s make, model and age.
  • How you use your car – including how many miles you drive a year for work purposes.
  • Your no claims discount (NCD).
  • Your driving history – any driving convictions, insurance claims or accidents.
  • Any additional drivers you want to add to the policy.

Our online comparison service will do all the hard work for you and provide you with a range of competitive quotes that suit your needs.

Once you have your quote, you can look at where you can make savings on your car insurance. The great thing about our comparison service is that it's easy to try different options to see how they affect your quote.

Dan Hutson

From the Motor team

What our expert says

“If you drive for work, you’re likely to be spending a good deal of time on the road. In 2018, 63 people driving for work were killed and there were 11,777 casualties - including those seriously injured and slightly injured. Although it can be more expensive, business car insurance can give you the cover you need, as well as peace of mind.”

Why use Compare the Market?

Get a business car insurance quote in 5 minutes^^ Compare quotes for 139 car insurance provider products^^^ 93.8%^^^^ of customers found our prices competitive or very competitive.

^^On average it can take less than 5 minutes to complete a car insurance quote through Compare the Market, based on data in November 2020.

^^^Correct as of June 2021.

^^^^For the period 1st March to 31st May 2021, 1,672 people responded to the statement “I think the prices provided by CtM are….” 1,569 responded with ‘competitive’ or ‘very competitive’ (93.8%).

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