What is Car Insurance for Businesses?
Business car insurance is insurance designed to cover vehicles owned by businesses or used for business purposes. South African companies and organisations can insure any motorised vehicles they own and use for business against risks like theft, fire, accidents, and third-party claims with this type of cover. Every type of business with a regular driver will need business car insurance.
How Does Business Car Insurance Work?
Car insurance for business vehicles covers vehicles used for business purposes at competitive rates. Since business vehicles face different risks than cars used for personal reasons, the scope of cover and costs differ.
Insurers usually calculate your premium by looking at your risk profile. They set up your risk file by looking at several factors, including driver behaviour, what the vehicle is being used for, how much time it spends on the road, where it gets parked at night, security, and more.
Business car insurance packages differ between insurance companies, but most insurers offer at least three levels of cover. First, there are third-party cover policies, which are the most affordable option. Second, there is theft, fire, and third-party cover, and last, there is comprehensive business car insurance.
Sometimes, insurers allow you to choose cover for any driver, but most often, you will need to specify which drivers will be using the vehicle. Car cover is a vital element in any commercial insurance portfolio and shouldn’t be overlooked as a risk mitigation tool.
Can I Insure My Personal Car on a Business Policy?
In South Africa, you often can, yes. Business motor insurance is vital for any vehicle used for your business regularly, even if the business doesn’t own it. This is because vehicles used for business have a different risk profile and shouldn’t be insured with personal auto coverage.
If you use your personal vehicle for business, a personal auto policy may not pay out when an insured event occurs. For example, if you are delivering packages and you’re in an accident. The fact that the car is being used for business but is insured under a personal policy could mean the insurer may reject your claim.
Who Needs Commercial Car Insurance?
Businesses of all sizes may need this type of cover if they own or use cars in their day-to-day operations to achieve business goals. Courier and delivery companies will need comprehensive insurance for their cars, as will logistics and transportation companies. Even if your business just uses one car to move equipment throughout the week, it needs to be covered under a commercial auto policy.
What Does Business Car Insurance Cover?
Business car insurance can cover the CEO’s car, your delivery truck, heavy-duty trucks, and transportation vehicles. It is important to check the policy details before you sign, since some insurers don’t include mini buses or certain types of vehicles in commercial auto coverages they offer. Policies cover risks like bodily injury because of a car accident, the costs of repairs, recovery of a stolen car, and insured events related to the insured car.
After you have chosen the level of cover you want, business car insurance companies sometimes allow you to choose optional additional cover. Optional added benefits you can choose to purchase can include sound equipment, glass, tyres, and cover for travel outside South Africa’s borders. Sometimes you can also get personal accident cover on a business plan.
Your insurer of choice will give you policy documents to inspect and sign. You can find out more about your optional extras and cover limits by reading through the documents carefully. Most policies also include benefits like emergency medical assistance, roadside assistance, and premium holidays.
Comprehensive Car Insurance
A comprehensive plan usually offers you the most coverage for a broad range of risks associated with your business vehicles or fleet. Comprehensive coverage includes damage and losses caused by accidents, intentional acts such as theft or hijacking, natural disasters such as hailstorms and hurricanes, and fires.
Third party claims are typically included in comprehensive policies, but they may not cover everything. Extras such as car hire options and 24 hour help lines might be available for an extra cost. This type of cover also usually has the highest insurance premium of the three options, because it covers the most.
Fire, Theft & Accident Insurance
South African business insurance companies most often offer a medium-level cover option. Usually, it takes the form of theft, fire, and accident cover. It includes third-party liability, but it isn’t as comprehensive as the most expensive plan will be.
Limited business car cover is a great option for companies that need a greater measure of cover but can’t afford comprehensive plans. But if natural disasters pose a significant risk to your business car, it may not be the best option.
Third-Party Liability Car Insurance
If your small business is on a tight budget, this is the cheapest budget car insurance, but also the most limited form of cover you can get for the company car. It doesn’t cover medical expenses, natural disasters, or even theft. It only covers third-party claims due to accidents where you cause damage to individuals or their property.
Looking for business car insurance quotes? Get quotes from the best business car insurance companies for your needs by filling in the form at the top of this page. It’s fast, easy, and obligation-free!
Disclaimer: Information contained within this article is intended solely for educational purposes and should never be used as a substitute for professional judgment. Information is correct at the time it was published.