If you run a business which requires or involves the use of company vehicles, it can be prudent to insure them, just as it would be if you owned the vehicles personally. However, many general insurers typically won’t provide cover for a car being used for commercial purposes under a standard policy, which may mean a bit of extra research is required.
Generally speaking, there are two main ways car insurance can be taken out on vehicles being used for business purposes:
- Personal comprehensive car insurance with added cover for ‘business use’; or
- Dedicated commercial car insurance.
The former may be useful for individuals who own a car personally but occasionally need it for commercial purposes, whereas the latter is often better for vehicles exclusively used for commercial purposes.
Business use car insurance
This is a feature you can add to a comprehensive car insurance policy. Certain insurers will, when going through the process of calculating a car insurance quote for you, ask if the vehicle you’re looking to insure is used for personal or commercial purposes. If you indicate that the vehicle is used for both, the insurer may offer you the option of adding cover for business use to your policy, under which you may be covered for things like:
- Your tools of trade being stolen or damaged while inside your car (this cover option can be referred to as ‘business items’)
- Your vehicle being driven by others for commercial purposes
Not all insurers will offer you cover for any business-related expenses or events, so you may have to check with individual insurers to discern who offers cover for business use.
That being said, if you are looking to take out a comprehensive personal car insurance policy with cover for business use, a good place to start could be to search for a great-value policy first, and look at business-use cover second. You can compare car insurance with Canstar to see if you can find the right car insurance policy for your needs.
While adding business-use cover to a comprehensive personal car insurance policy can work for occasional business use, it may not be appropriate if your vehicle is essential to you for commercial purposes, or used mostly for commercial purposes. In this case, you may need to take out a dedicated commercial car insurance policy.
Commercial car insurance
Commercial car insurance may be a good option for you if you own or are responsible for one or more vehicles used mostly or exclusively for business purposes.
Many Australian insurers that offer personal car insurance also offer a commercial car insurance product for business fleets ranging from a single vehicle to as many as twenty different vehicles including trucks, 4WDs, earth-moving vehicles and so on. However, insurers that offer commercial car insurance sometimes only do so through licensed brokers, which means obtaining insurance for your business’s vehicles may be less straightforward than applying online for a personal car insurance policy.
Whether you opt for business use cover or full-blown commercial car insurance, legally speaking your vehicle needs to be insured under at least a CTP (compulsory third party) policy, regardless of where in Australia you live and work. However, a CTP policy doesn’t cover you for the costs of damage to your or anyone else’s car or property. To be covered for that, you’d need to take out a comprehensive car insurance policy. You can compare comprehensive policies and choose one that suits your needs with Canstar.