With over three million vans on British roads, Commercial Van Insurance is needed more than ever. There can be a lot of confusion between the different specifications and classes of vehicles, this guide has been created to cut through all the jargon and terminology.
Firstly, is commercial insurance for vans right for you? You need this type of policy if:
• You use a van to commute to work, this doesn’t matter if your work location is a single trip, or various (you could be a plumber who does several jobs a day).
• You offer carriage of your own goods, carriage of goods for hire or reward, or you’re a haulage company.
• If you use a van for ‘social purposes only’, and do not use the vehicle for transportation or work, then private van insurance is correct for you.
Generally, basic commercial cover is just like a standard car policy, it covers you for a range of different requirements:
Third Party Only (TPO) – In the United Kingdom, third party van insurance is the minimum legal requirement you need to drive on British roads. However, this type of policy will only cover you for damaged caused to another vehicle, person or property by your van. It will not cover the cost of repairing any damaged to your own vehicle.
Third Party, Fire and Theft (TPFT) – Third party, fire and theft van insurance gives the same type of cover as above. However, it also meets the cost of damage or loss arising from a fire, or if your van or personal (non-commercial) belongings inside it are stolen.
Fully Comprehensive – Fully comprehensive van insurance gives you the maximum level of protection. Most policies will insure you against damage to your van irrespective of whether you’re at fault, as well as to other vehicles, people and property.
Just like any type of insurance, every provider is different, so always read the small print before taking out any policy. A good point to remember is the fact you should never assume that the most basic cover automatically means the cheapest van insurance.
Sometimes a third party only policy with one insurer can be more expensive than a fully comprehensive policy with another. It’s always recommended to compare premiums to make sure you’re getting the right product at the right price.
Equally you should also be aware that some insurers won’t provide cover for van drivers under a certain age, such as 21. It’s not uncommon for this age to be even higher, some companies have in the past quoted ages of 25 and even 30.
Understanding the Classifications of Business Van Insurance
As businesses have many different uses, there is a wide range of policies which will offer different levels of cover. For example, a standard plumber going to maybe two jobs a day, will generally have cheaper premiums than a parcel courier, who may visit over one hundred addresses per day.
Unfortunately confusion surrounds the fact that many commercial insurances will only apply to ‘self-employed drivers’ using their van to carry out a trade.
But in fact, commercial cover is needed by people in employment as well, who drive their van to and from a sole place of work. This potentially means, that if an employee drives a ‘works van’ to work, the commercial insurance may not actually cover the commute. It may be time-specific and only start from 8 in the morning, for example. While other providers may offer full coverage, it’s certainly a minefield. It’s extremely important that you review and consider this type of information before committing to any policy agreement.
The standard types of classifications in the UK are:
Carriage of own goods – This one is self-explanatory, it basically means that the policy will cover van drivers carrying equipment and tools needed in their profession. This will usually apply to builders, plumbers, etc.
Carriage of goods for hire or reward – This classification typically applies to drivers such as delivery drivers, predominantly those who make multiple deliveries to a range of customers and addresses.
This type of policy generally covers damage to the van itself, however some policies will insure the goods carried in transit too. This is not always the case however, and will vary massively from different insurers. Generally you may need to take out an extra ‘goods in transit’ insurance.
Haulage – This can be a tricky one, generally there’s a slight ‘overlap’ between haulage and carriage of goods for reward or hire. It all comes down to the wording on the policy agreement. This is because it might be the same, even though there’s a subtle difference between the two.
Typically the reward or hire classification tends to apply to drivers delivering to many addresses. Whereby haulage tends to be for drivers taking a ‘single load’ to a destination a long distance away.
However to confuse matters more, some haulage insurance policies can also offer cover for courier work. If in doubt, check with your current or potential insurer provider for a full clarification.