Vehicle Insurance - Types of Cover Explained
Choosing the Correct Vehicle Insurance when used on Business even occasionally can save YOU a lot of Money and Protect both Employer and Employee
"Company" or "Business" Vehicle InsuranceVehicle Insurance - When operating vehicles on behalf of the Company, it must be recognised that the vehicles should be correctly insured.
If the vehicle is technically "owned" by the Company, irrespective of how it is financially funded then it is clear that the Company must act to ensure that it carries Insurance to cover all aspects of its vehicle operation.
However when a vehicle is "owned" by an employee the onus of responsibility rests with both the employee and the Company to ensure that the correct insurance cover is in force.
If the employee is paying for the Insurance Cover then it is more than likely that cost rather than scope of cover will be of primary consideration to the employee.
The Company must take care to inspect and record details of the employees vehicle insurance to ensure that it adequately covers the work that the Company expects the employee to carry out and if it does not then the employee should not be allowed to use their vehicle on behalf of the Company until the correct cover has been obtained.
Types or Class of Vehicle Insurance CoverUnfortunately not all Insurance companies use the same terminology, which can make the checking of employees cover both complex and a chore.
All Insurance companies will have a version of the following, which limits the business use of the vehicle.
Social Domestic and Pleasure (SD&P)Social Domestic and Pleasure (SD&P) - Excluding commuting to and from work.
This may be fully comprehensive of third party but clearly excludes any business use.
Social Domestic and Pleasure (SD&P) - Including commuting to and from a single place of employment!
This may be fully comprehensive or third party but would even exclude the smallest amount of business use!
Class 1.Class 1 - Full business use by the policyholder and spouse - Excluding commercial travelling*
This is the type of cover, which would cover any employee, from Chief Executive to office junior, to travel to meetings anywhere in the country or even just to the bank once a week.
However, if the employee takes out the insurance, there may be restrictions such as a maximum annual mileage.
Class 2.Class 2 - Full business use by the policyholder, spouse and other persons - Excluding commercial travelling*
Class 3.Class 3 - Similar to classes 1 and 2, but - including commercial travelling*
Commercial Travelling*Commercial Travelling* - The expression commercial travelling is somewhat dated with job descriptions such as sales executive and area sales or service manager having superseded commercial traveller or even sales representative.
If an employee makes visits to customers or branches of a business on a regular basis then class 3 insurance would be the correct cover.
Unfortunately the world of insurance is not simple and "limitations to use" and "Exclusion" clauses are frequently inserted which necessitates careful checking of the insurance documents of an employee to ensure that they have adequate cover for the work they are required to undertake.
This means all must have "Business Insurance" of one type or another for all vehicles used on any business of that company or organisation. You must also include insurance on your Vehicle Driver Checklist!
Check the Driving Licence as well as the Vehicle Insurance!
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