What is business car insurance?
Business car insurance isn't a single product; rather, the term refers to policies that protect vehicles used for work against losses from insured events like theft, fire or a collision.
Business use involves the frequent use of a car to perform daily work tasks, like meeting clients or vendors.
Like private car insurance, business car insurance often comes in three tiers with varying levels of cover: comprehensive, third party fire and theft (TPFT), and third party property damage (TPPD).
However, private car insurance typically does not extend to covering business activities.
Types of business car insurance
Generally, business car insurance policies come in two types:
Type of | Information |
|---|---|
Personal car insurance |
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Commercial |
|
The type of business car insurance you should pick will depend on:
- Your budget
- The frequency of business use
- The type of vehicle you’re insuring
- The type of business use your vehicle is engaged in.
But before taking out any policy, it’s important to read its Product Disclosure Statement (PDS) and Target Market Determination (TMD) to understand what is and isn’t covered.
Keep in mind that business car insurance exists in addition to Compulsory Third Party (CTP) insurance, which is mandatory for all vehicles registered in Australia (costs vary between states and insurers).
Is business car insurance mandatory?
Unlike CTP insurance, a separate business car insurance policy is not compulsory.
However, business car insurance can be valuable in protecting you from unexpected business costs and/or disruption if your vehicle is lost or damaged.
What does business car insurance cover?
Generally, what business car insurance covers and doesn’t cover is similar to a car insurance policy for personal use.
What business car insurance will cover will depend on the level of cover and insurer you choose, as well as the inclusions. Below are general examples to indicate what may be included on each level of car insurance cover:
Level of | Inclusions |
|---|---|
Comprehensive |
|
Third party fire and theft |
|
Third party property damage |
|
Note: What’s actually covered can vary considerably from provider to provider. It’s crucial to double-check the inclusions, exclusions and limits by reading any PDS and TMD documents.
Depending on your insurer, there may be extras you can choose from for better financial protection (for an extra fee), such as windscreen replacement, roadside assistance or rental car use.
What does business car insurance not cover?
While this will vary between insurers and policies, there are some exclusions that may be common, for example:
- Certain kinds of vehicles and their commercial or business purpose, like taxis, rideshares (although it may be possible to get rideshare car insurance via some providers), emergency vehicles and heavy vehicles operated by a driver below a specified age.
- Driving without a licence
- Damage or loss if the driver of the vehicle is under the influence of alcohol or drugs.
- Theft or loss, if reasonable care has not been taken to secure the vehicle.
- Loss of income or revenue resulting from an insured event.
- Claims made if the vehicle was already damaged, unsafe or unroadworthy.
- Damage from general wear and tear.
Other exclusions and limits may apply. Check with your provider or read the policy’s PDS and TMD for more details.
How do you get business car insurance?
For certain policies, you may be able to compare options online or apply directly with an insurance provider. For more specialised or complicated policies, you can discuss your needs with a car insurance broker who can recommend providers.
As part of the application for business car insurance, you’ll usually be asked to provide detailed information about your business and the vehicle(s) being insured, such as:
- The type of car being insured
- How old the car is
- The average number of kilometres it’s driven per year
- The type of cover you require
- If the car has been modified
- Who’ll be driving the car
- If the car will be used to make deliveries or transport goods for a fee.
The provider will then give you a quote outlining what they’ll cover and at what cost.
Alternatively, you can compare comprehensive car insurance policies with Canstar.
Can you insure a car using a business name?
Most insurance providers require a vehicle to be insured and registered under the same name. If the vehicle is registered under your name, your insurer may request that the name of your associated business also be provided.
The business name may also be listed on the policy. For example, even if the vehicle is insured under a person’s name, any business use cover may only extend to activities carried out for a named business.
