Who Is Responsible For Insuring A Company Car?
The responsibility for insuring a company car typically falls to the employer or the company that owns the vehicle. Businesses are required to provide at least third-party cover for all company vehicles, ensuring they meet the legal requirement for driving on UK roads.
Most companies opt for fleet insurance or business car insurance policies, which cover multiple vehicles under one policy. These policies provide protection for any authorised employee who drives the car, whether for business or personal use.
- Fleet insurance: Covers multiple company cars under one policy, making it easier for businesses to manage insurance for all their vehicles.
- Business car insurance: Typically covers employees for work-related travel, such as client visits or deliveries.
If you drive a company car, check with your employer to confirm what type of insurance is in place and what it covers.
Am I Covered For Personal Use Of A Company Car?
One of the key considerations when driving a company car is whether you’re covered when using the vehicle for personal reasons. Whilst most company insurance policies cover work-related driving, personal use may not always be included.
Here’s how personal use of a company car typically works:
- Work-only cover: Some company policies restrict cover to business-related activities only, such as commuting or attending meetings. In these cases, you may not be insured if you use the car for personal errands.
- Personal and business cover: Other policies extend to personal use, allowing employees to use the car for both work and private activities, such as weekend trips or shopping.
If you’re unsure whether your company car insurance includes personal use, it’s important to ask your employer or check the terms of the policy. Driving a company car without the appropriate cover for personal use could invalidate any claims made during non-work-related trips.
Can You Add Personal Insurance To A Company Car?
In some cases, employers may allow you to add personal car insurance to a company vehicle to cover private use. This can be an option if your employer’s insurance only covers business-related driving. However, not all companies offer this flexibility, so it’s often suggested as a favourable course of action to confirm the details with your employer before arranging additional cover.
If adding personal insurance is an option, here’s what you should know:
- Additional cost: Adding personal cover to a company car may increase the cost of insurance, and you may be required to cover the difference.
- Legal responsibility: Ensure the policy clearly states whether you or your employer is responsible for covering personal use. This can impact any claims you make for incidents that occur during non-work-related driving.
If you need extra cover for personal use, shop around and compare insurance options to figure out a policy that fits your needs without conflicting with your employer’s business insurance.
Does Your No-Claims Bonus Apply To A Company Car?
A no-claims bonus (NCB) is a valuable feature for reducing the cost of personal car insurance, but when it comes to company cars, it doesn’t always apply. If you’re driving a company car, any claims made on the vehicle typically affect the company’s insurance, not your own personal NCB.
However, some insurers allow you to transfer the no-claims bonus earned on a company car to your personal policy when you switch to your own vehicle. This can vary between insurers, so it’s important to check the terms before assuming your NCB could carry over.
- No impact on personal NCB: Claims made on a company car generally don’t affect your personal no-claims bonus.
- Transferable NCB: Some insurers allow you to transfer a no-claims bonus from a company car to a personal policy, provided you can show proof of a claim-free driving record with your employer.
If you plan to switch from driving a company car to owning your own vehicle, ask your employer for a letter confirming your driving record to help transfer any no-claims bonus you may have accumulated.
Are You Covered For Business Use In Your Own Car?
If you use your own car for work-related travel, such as visiting clients or travelling between office locations, your personal car insurance may not cover business use. Standard car insurance policies generally only cover social, domestic, and commuting use, so you’ll need to add business car insurance to ensure you’re fully protected.
Here’s how to ensure you’re covered for business use in your own car:
- Check your current policy: Review your insurance policy to see if it includes cover for business-related driving. If not, contact your insurer to add this cover.
- Choose the right class of business cover: There are different classes of business insurance, ranging from cover for occasional work-related trips to more extensive cover for frequent business travel. Choose the right one based on your needs.
Without business car insurance, any claims you make whilst using your car for work purposes may be invalidated, leaving you with potentially large out-of-pocket costs.
What Happens If You Have An Accident In A Company Car?
If you’re involved in an accident whilst driving a company car, the process for handling the claim might depend on the insurance policy in place. In most cases, the company’s insurer might handle the claim, and you won’t need to involve your personal insurance. However, it’s important to follow the correct procedure to ensure the claim is processed smoothly.
Here’s what to do if you have an accident in a company car:
- Report the accident: Notify your employer immediately, as they may need to inform their insurer of the incident. Provide all the necessary details, including the time, location, and any other drivers involved.
- Follow the company’s claims process: Your employer might guide you through the claims process, which may include providing photos, a police report, or witness statements if necessary.
- Repair or replacement: Depending on the extent of the damage, the insurer could either cover the cost of repairs or provide compensation if the car is written off. Your company could likely manage the repairs or replacement process.
Accidents in a company car are handled differently from those in your own vehicle, so it’s important to understand your employer’s insurance policy and claims procedure.
Do You Need Insurance For A Company Car If You’re Self-Employed?
If you’re self-employed and use a vehicle registered to your business, you’ll need to arrange your own insurance, as there’s no employer to provide cover. In this case, you’ll need business car insurance, which covers the vehicle for work-related activities.
Here’s what to consider if you’re self-employed:
- Business use: Make sure your policy includes cover for business activities, such as visiting clients, transporting equipment, or attending meetings.
- Named drivers: If other people use the car for business purposes, ensure they are listed as named drivers on the policy to avoid invalidating any claims.
Self-employed drivers need to ensure their vehicles are covered for both personal and business use to stay protected on the road.
How To Ensure You’re Fully Covered When Driving A Company Car
To make sure you’re fully covered when driving a company car, it’s commonly a practical suggestion to understand the terms of your employer’s insurance policy and whether it includes personal use. If you need additional cover for private driving, speak to your employer about adding personal insurance or arranging your own cover.
Here are the key steps to ensure you’re properly insured:
- Check with your employer about the type of insurance in place and what it covers.
- Confirm whether personal use is included or whether you need additional cover.
- Consider protecting your no-claims bonus, especially if you regularly drive a company car.
Staying informed about your insurance cover may be the most cost-effective way to protect yourself from unexpected costs or claims issues when driving a company vehicle.
Looking for more information about car insurance? Compare quotes today to look for the best policy for your driving needs, whether it’s for a company vehicle or your own car.
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