Company Car Insurance
Company car insurance in Ireland applies where private vehicles are used for business-related driving beyond standard social and commuting use.
What is Company Car Insurance?
Business use is treated differently by insurers because work-related driving often involves higher annual mileage, multiple drivers, travel between sites, or transporting goods and equipment. These factors change the vehicle’s exposure profile from that of private use.
Company car insurance covers:
- Employees when they are using a company car to go on work related trips.
- Directors or owners that drive between business locations.
- Self employed individuals using their personal car for client visits.
- Businesses that insure their vehicles that are used in the normal course of their day-to-day activities.
The type of cover required will depend on how the vehicle is used, who is using the vehicle, and if it forms part of a wider fleet structure.
Why Insurers Treat Business Use Differently
Insurers treat business usage differently, as business usage tends to affect the frequency and manner in which an insured’s vehicle is exposed to risks.
The typical social/commuting usage (e.g., going to school/work and running errands) generally means that the vehicle is used during predictable times and for relatively short distances. In contrast, a vehicle used solely for commercial purposes may have a significantly different “exposure” profile.
Higher Annual Mileage – Business vehicles usually cover more miles each year. They also run for many hours each week.
Variety In Driving Environments – Business trips are different from personal drives. They may take you on unknown roads. You could encounter rural routes and construction zones. Also, city centres often have heavy traffic.
Multiple Drivers – Many employees operate the majority of company vehicles. This creates an increased level of complexity for underwriters when evaluating risks.
Goods Or Equipment Carried – Transporting tools, stock, or materials raises the risk of theft. This also increases the chance of significant claims.
Visibility Of Vehicle Branding – Vehicles with branding are more visible in public which can potentially increase the risk of theft or vandalism
Time Pressure To Meet Schedules – Commercial business are on deadlines to meet delivery expectations. This increases the risk of accidents compared to just regular personal vehicle use.
Types of Business Use Insurance Classes
There are three main types of business car insurance available in Ireland: Class 1, Class 2, and Class 3.
These relate to how the vehicle is used for work purposes and choosing the right class is important to ensure that you’re fully covered.
Class 1: Occasional Business Use
Class 1 business use insurance is the simplest form of company car insurance, and is for driving between work locations, visiting clients or site visits. This class of cover is not suitable if your business delivers or transports goods or equipment.
Class 2: Shared Business Use
This is similar to Class 1, i.e., it covers you for driving between work locations and visiting clients. However Class 2 use also allows for multiple named drivers to use the same vehicle for the same work purposes, which may increase your premium.
Class 3: High-Frequency Business Use
Class 3 business use motor insurance applies where vehicles are used for higher-frequency journeys, deliveries, or if the business operations sometimes require extended travel.
What Is Commercial Use vs Business Use?
It is also important to understand the difference between commercial and business use.
Commercial use – Vehicles are used as an essential part of a business, such as a van used for transportation.
Business use – Everyday business journeys where the vehicle is not itself used to generate income. This can include employees travelling between offices or other non-commercial journeys.
Why Do You Need Business Car Insurance For Work-Related Driving?
Company cars are important for businesses that use cars or vans as part of their business operations.
You may need business insurance for various reasons, such as:
- Employees driving between work locations
- Transporting materials
- Carrying tools to a location
- Deliveries
- Visiting clients
- Fieldwork travel
What Factors Affect Business Car Insurance Costs?
The Class of business use you need will influence the cost of your insurance policy. Class 1 is the cheapest option, and Class 3 – which covers higher risk situations – is generally the most expensive.
Insurers will take into account distance when calculating your premium, as the higher the mileage, the higher the risk. For this reason, higher annual mileage thresholds means higher premiums.
Some industries or businesses are considered higher risk than others. For example, travelling between two offices in the city centre doesn’t require the same level of cover as transporting goods over long distances.
Insuring more named drivers on your company car insurance policy will affect the price of your premium, as more drivers means higher risk for the insurer.
This is taken into account by providers as it can determine how much the insurer needs to pay out if you make a claim for damage, fire or theft.
Some insurers use stricter rules for less-experienced drivers on business policies. It’s common for people to use vehicles a lot, travel far, or face high replacement costs.
As well as age, having a strong no-claims history will decrease your premium, because it signals to the insurer that you are less likely to claim in the future.
Not all locations are equal. Business car insurance in Dublin city centre will likely cost more than in a rural area because of a higher likelihood of theft.
What you transport in your vehicles affects costs, with higher value goods or equipment costing more to insure.
If you transport passengers or clients in your vehicle, your insurer may take this into account when calculating costs in case of personal injury to the passenger.
Adding security measures, such as CCTV on your premises, high quality alarms, or trackers, can decrease the cost of insurance as it makes theft and vandalism less likely.
What Insurance Cover Do Business Cars Need?
Business vehicle insurance needs go way beyond what you need to legally drive. It is mostly about protecting your operational assets. For most companies, comprehensive insurance cover is recommended. While premiums for comprehensive cover are higher, it provides peace of mind that you’ll likely be covered if something goes wrong.
| Benefit | Third Party | Comprehensive |
|---|---|---|
| Legal Compliance | Yes | Yes |
| Theft and Fire Protection | No | Yes |
| Accidental Damage to Your Vehicle | No | Yes |
| Downtime Minimisation | No | Yes (Includes temporary replacement car) |
Why Is Comprehensive Cover Recommended for Business Vehicles?
Comprehensive vehicle insurance covers you for liability claims made by other drivers, theft and fire to your vehicle, and damage caused to your vehicle in addition to accidents involving another vehicle.
Many business owners opt for comprehensive insurance because:
- Vehicle downtime can stop your business from operating and affect customer satisfaction.
- If your company requires additional vehicles in order to continue trading, then these vehicles will have to be replaced at the expense of the business.
- Higher value vehicles mean higher potential losses if they are damaged or stolen.
Comprehensive insurance often costs more than third party, fire, and theft. But insuring your company vehicles this way gives you more certainty. If one of your vehicles is damaged or stolen, you’ll know how your business can recover.
What Is Fleet Insurance for Businesses?
Fleet insurance in Ireland is used to insure two or more vehicles with one motor policy for a company.
The insurer will not just rate vehicles on their own. Instead, they will consider the overall risk of all the company’s vehicles. They will check the claims history. They will look at how the company manages its drivers. They will also consider the types of vehicles employees drive. Finally, they will review how those vehicles are used.
Typically, the insurer will assess and renew all the vehicles in the fleet on the same day, as a group, rather than assessing the price of an individual vehicle based solely on that vehicle.
Fleet cover works well when multiple drivers and vehicles are assessed collectively rather than individually. It’s also ideal for companies that use several cars or vans in their daily business
Business Car insurance FAQ
Yes, but only if this is included in your policy. Adding business use to your policy will increase your premium but this is crucial as you are unlikely to be covered for road accidents while at work without it.
No, commuting (driving to work) is not seen as being at work by insurance providers and can be included in a standard personal insurance policy or added as an extra.
Not automatically. Replacements or repairs to tools or equipment can be included as an add-on to your insurance policy.
Yes, self-employed people can also take out business car insurance. This can be tailored to their specific needs.
The difference between business and commercial insurance is the way vehicles are used. Business car insurance can mean driving from one office to another, while commercial insurance is where vehicles like delivery vans or trucks are an essential part of a company’s daily activities.
Yes, adding business use to your existing insurance policy can usually be done with most Irish providers.
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