A commercial motor trade insurance policy will be vastly different from standard vehicle cover. Knowing the difference and when you need to upgrade, could make a huge difference should you be involved in an accident or stopped by the traffic police.
Having the wrong insurance could mean that your cover is invalidated, leaving you unable to make a claim and out of pocket.
Here some of our suggestions when deciding which type of cover you need, and how to avoid any costly disputes with your insurance broker.
1. Have the correct address
Submitting the wrong address on your van insurance premiums, or forgetting to update a change of address, can invalidate your whole policy and leave you uninsured.
The cost of a car insurance premium is dependent on postcodes and can differ greatly, even when addresses are relatively close. Factors such as crime rate, risk of accident and how built up the area are, will all be taken into account when looking where your business is based.
Never be tempted to submit a different address to try and get cheaper insurance, and this includes your parents. Addresses are validated by car insurers regularly, so it is unlikely you will get away with it, leading to future claims being rejected.
2. Do not pass yourself off as part-time
Choosing part-time motor trade insurance when you need full-time could mean that you are not sufficiently covered in the event of an accident. It’s also not advisable to pass yourself off as a part-time trader to enable you to get cover to drive any car (business and personal). If found out, your insurance will be cancelled.
3. Driving a motor trade insured vehicle for personal use
A motor trade insurance policy will only provide valid cover for your vehicles while they are being used for business activities. Technically, using your van to take your kids to school or do the shopping means you are driving without insurance.
To prevent this, it is possible to extend your insurance policy to include personal use and commuting to and from a place of work, so have a chat with your insurance broker.
4. Multi use for part-time motor traders
Part-time motor traders are more likely to need to use their vehicles for personal or other business reasons. This can be covered under a part-time motor trade insurance policy, but you must notify your insurer of this in advance otherwise your policy will be invalid.
5. Adding additional drivers to your policy
Only named drivers have permission to drive a vehicle that is covered by a motor trade insurance policy. If an unnamed driver gets behind the wheel of the vehicle, they will not be protected.
If your partner or spouse needs to use the vehicle for personal use or work, you will need to ask your insurance broker for an additional driver to be added to the policy.
6. Keeping quiet about convictions
There’s no hiding from your previous driving convictions. Insurers have a database of all convictions issued in the past five years and they will look you up before giving you a quote. Be honest and your broker can do their best to find the right deal for your business. If you lie to your broker, and they find out later, they may cancel your policy and leave you uninsured.
7. Courier deliveries without the right insurance
If you are using your own van, MPV or car to deliver parcels without having the correct courier insurance, you will not be covered should you have an accident. When a vehicle is being used for financial gain, the vehicle is classed as ‘commercial’ and you will need some additional insurance to make sure your cargo, and you, are protected.
If you are using your vehicle for deliveries, you are at greater risk of an accident and your premium will reflect that.
8. Not keeping your car in good condition
Before you set out each day, it’s a good idea to check the condition and pressure of your tyres, top up your radiator with water and check that your number plate isn’t obscured by mud and grime in this wet weather. If the breakdown is caused by a lack of maintenance, your insurance could be rendered invalid.
In addition, obstructing your windscreen in any way could also mean you aren’t protected by your insurance policy. To avoid this, clear morning frost or snow, keep the screen clear of mud and dirt and don’t have too many things crowded in the front of your windscreen, limiting visibility.
9. Changing your job or getting a promotion
Your occupation is a major factor that insurers consider when setting out your quote. A new job might mean a longer commute or more mileage in general. Greater time on the road would put you at higher risk. As a courier, you might be expanding your region or carrying more expensive items. All may require a different cover to prevent your policy being invalidated.
10. Being clear about where you park
When calculating your premium, insurers will ask you to clarify where you keep your vehicle parked at night as this impacts the risk of damage or theft. If you state that you keep it in a locked garage overnight, then park it in the street, this might invalidate your cover and you could stand to lose your van, tools or both.
11. Starting a taxi service
We all joke about being a personal taxi service, but if you do start charging for rides, even if it’s just a car share, you could be fined up to £2,500 and have your vehicle seized. Anyone who charges for lifts needs a special licence and taxi insurance.
12. Making modifications to your van
There are many things that can be classed as modifications including re-fitting the interior or adding external racking, installing extra seats, increasing engine performance or adding refrigeration or cooking equipment if you are thinking of turning it into a mobile food van. Speak to your insurer before carrying out any modification to check if your insurance will be affected.