Different Classes of Business Car Insurance

What is it?

If you own a vehicle that is used for work purposes, you will need to get business car insurance. This is different from a standard policy that usually covers vehicles for domestic, social or commuting use.

This type of insurance is important since it covers a wide range of uses including traveling from one location to another for work, visiting clients or customers as well as transporting employees. This type of insurance covers anything that is done using the vehicle on behalf of the company.

This type of insurance however, demands that you pay higher premiums than you would for a standard policy.

However, it is not worth the risk to stick to a regular policy if your vehicle is used for work related activities. If anything were to happen to you while driving your car for work purposes on a standard policy, you may not be compensated.

Types of business cover

If your vehicle is used for purposes related to business, it is important to get a specific insurance policy that covers business activities. This ensures that any incidents occurring while you are on work related tasks will be covered. There are different levels of business cover available from insurers today. These include:

  1. Class 1:

This covers the vehicle that you drive in connection to your job. You will be covered for incidents occurring while driving to different locations away from your primary work station. A class 1 cover can also be used for a spouse who uses your vehicle for business purposes. This class of insurance will however not cover any other named driver.

It is important to check the wording used by an insurer when taking a class 1 policy. There are several things that are excluded from this type of cover including, commercial use of the vehicle (e.g. delivery of goods) and sales (e.g. door-to-door sales).

Any other driver apart from your spouse that uses your vehicle will be covered under standard policies and will therefore not receive pay outs for claims made for incidents occurring while driving the car for business purposes.

  1. Class 2:

There are several variations of the Class 2 cover available. The level of cover depends a great deal on your insurance provider. The policy however usually covers the policyholder as well as any other named driver using the vehicle for business use. It is also vital to pay attention to the wording used by the insurer to be clear on the conditions for the named driver. Some insurers will only pay out claims if the named driver is in the same profession as the policy holder.

Like Class 1 policies, class 2 policies also exclude sales and commercial use of vehicles.

  1. Class 3

This provides a more comprehensive cover for business vehicles. It includes cover for some selling purposes including door to door sales as well as some commercial use (e.g. delivery of flowers or meals).


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