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Business Car Insurance

Vehicle Insurance for Business Use

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What is business use car insurance?

If you drive as part of your job, you’ll likely need business car insurance. This covers activities like visiting clients or travelling between job sites. But if you’re just commuting to and from one workplace, standard car insurance is usually enough. There are three usage options to choose from when you take out car insurance. These include: 

Social, Domestic, and Pleasure (SDP)

This covers you for all of your personal journeys in the car. Like visiting friends and family, or going to the shops

SDP and Commuting (SDP&C)

This covers your daily commute to and from your regular workplace, as well as social, domestic, and pleasure use.

SDP&C and Business Use

This is a comprehensive option that offers the same protection as the previous two, as well as using your car for work tasks.

Why do I need to insure my car for business use? 

If you don’t have business car insurance, your insurer might not pay out for accidents that happen while you’re driving for work. Simply put, if you don’t have business car insurance, you aren’t insured when driving for work purposes. 

What’s more, if you misrepresent how you use your car, you could void your policy (whether you meant to or not). You also risk breaking the law by driving without the right insurance.

Who needs business use on car insurance?

Some examples of when you might need business use cover include if you:

Drive between different workplaces or job sites

Visit clients as part of your job

Attend training courses or work-related conferences

Transport tools, samples, or business documents

Make sales or promotional visits

Run work-related errands like going to the post office or bank

Deliver goods or provide mobile services

Use your car to travel between multiple business appointments

Types of auto insurance for business use

Covers occasional work-related driving. For example, driving between multiple places of work, or occasional travel for client meetings.

This option provides identical coverage to class 1, but allows you to add a named driver. This is ideal for employees who share a company car. But most insurers require all drivers to work for the same company. 

This option is for people who drive long distances regularly for work. Also called “commercial travelling”, this is ideal for sales reps and other high-mileage business drivers.

What does business use insurance cover?

What can be covered

If you’re thinking about business use car insurance, it’s helpful to know which type of coverage suits your situation.

What is not covered

Business use car insurance usually excludes:

Additional coverage available

The cost of insuring a car for business use

How much is business car insurance?

How much you’ll pay for your business car insurance also depends on:

  • The car you drive – insurers check your car’s make and model and its car insurance group.
  • Your estimated mileage for work and for social, domestic or leisure activities.
  • Your no-claims discount and your driving record.
  • Your age – Young drivers, usually pay more due to higher risk, while older drivers often get cheaper rates.
  • The class of coverage you need – Class 3 business use is typically the most expensive. These drivers spend more time on the road, making them a higher risk for accidents and claims.

Who pays for business use insurance?

Typically, business car insurance is covered by the company you work for. This is because they own the vehicle you’ll be using.

However, It’s still a good idea to go over the terms and coverage with your employer.

These policies can come with restrictions like mileage allowances.

If you work for yourself as a sole trader, you’ll need to set up and pay for your own business car insurance.

How can I get cheaper business car insurance?

Business car insurance can be more expensive than standard cover. But there are several ways to help lower the cost. 

Compare quotes from multiple insurers

Increase your voluntary excess

Keep a clean driving record

Limit your annual mileage

Pay annually if possible

Only choose the cover you need

Vehicle Insurance for Businesses FAQs

Does business car insurance cover social use?

Yes, but only if specified in the policy. Some business use policies include social use, but others require separate coverage. 

Can I change my car policy to include business use?

Yes, you can usually upgrade your existing policy to include business use. Contact your insurer to adjust your coverage. 

Does covering business use increase insurance costs?

Yes, adding business use typically costs more than standard coverage. This is due to the higher risks insurers have to take into account. Your job might involve more time on the road, and driving on unfamiliar roads. This can increase your chances of getting into an accident. In the end, your premium price will reflect the expense of covering your risk.

Does a comprehensive policy cover business use?

Comprehensive car insurance gives a broad range of protection. But it doesn’t usually include business use by default. So if you drive for work beyond commuting, you’ll need to request business use cover specifically.

Does my insurance cover business use?

Check your policy details or contact your insurer to confirm if business use is covered. Standard policies usually do not include it. 

Can I get a car policy for business and personal use?

Yes, many insurers offer combined policies that cover both business and personal use. Ensure your policy explicitly includes both to avoid coverage gaps. 

Page last reviewed on 16th June 2025 

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