As well as being a matter of social and legal responsibility, insuring your van is vital to protect your business. This protection literally comes at a premium, but good commercial vehicle insurance will give you peace of mind to face a wide range of issues.
Besides protecting you from the cost of repairing or replacing your vehicle, commercial vehicle insurance also gives you financial protection against personal injury. Provided you're unable to work because of an accident, your income will stay protected. Insurance policies and what they cover will vary between carriers, so it's important to consider every detail before taking out a policy. Here are four things to remember, when it comes to insuring your van...
1. It's a legal requirement
The "Road Traffic Act" stipulates that all drivers are legally obligated to be insured, whenever they're on the road. This includes insurance against damage, or injury to other drivers. Therefore, vehicle insurance isn’t just about protecting you – it's also supposed to cover any other parties that may be affected, whenever you're involved in an accident. That is one reason why the potential penalties for driving uninsured are so severe. They include:
- A fixed penalty fine of £300
- 6 penalty points
- Seizure and destruction of your van
- If you've been driving for less than two years, you could be disqualified and forced to retake your driving test
If your case ends up going to court, the situation can become even more serious. Court penalties may include disqualification from driving – potentially putting you out of business – as well as an unlimited fine.
2. It's a practical requirement for you and your business
Legal penalties aside, driving uninsured carries heavy risks for you and your company. If your van is badly damaged or written off, you may well be unable to go about your normal business until it's fixed, or until you obtain a new one. This can represent a serious loss of income. Other than a financial risk, you're putting your own livelihood on the line, should you find yourself badly injured and unable to work. Without insurance, serious injuries (or even death) could put a big weight on the shoulders of your loved ones. You might also face significant claims, from anyone else injured in an accident that you were involved in. Hence the urgency of making sure that your coverage is adequate.
3. Insurance for another vehicle probably doesn't cover your van
Keep in mind that your van’s commercial vehicle insurance is different from ordinary car insurance. Though you may be insured to drive a Renault van, it's unlikely that you’ll be insured to drive any other type of vehicle. It's also important to remember that when you take out a policy on your van, it's not insured to be driven by anyone else.
4. Different kinds of vehicles require different kinds of insurance
It seems fairly obvious that you don’t need any old insurance: you require one that fits the type of vehicle you plan to drive, but also its specific use. If you don't have the right one, you could be liable for legal penalties, as previously mentioned. Also note that many insurance providers will likely have offers tailored to your kind of enterprise, and specific area of business. Different types of insurance include:
- Private or personal van insurance is not suitable for work vehicles, as it covers vans that are used for social, domestic or leisure purposes (which includes regular commute to a single workplace). If you are using a van for your business and only have private van insurance, you are effectively uninsured.
- Business or commercial van insurance is required for vehicles used for work purposes. In concrete terms, this includes vans used to transport tools and equipment and/or to travel between multiple places of work.
- Pick-up van insurance is a good option for mixed-use vehicles – work vehicles that can be driven for personal or social reasons, or private vehicles that are occasionally used for business.
- Catering van insurance is necessary for catering traders and the issues specific to their business – notably health and safety requirements. This will be a requirement, for instance, to operate a mobile food truck or ice cream van.
- Finally, note that young driver van insurance, aimed at drivers under 25, can be much more expensive than the average. If you or one of the drivers in your enterprise are under 25, you may want to investigate sharing insurance with an older and more experienced driver to avoid heavy premiums.
One final thing to remember about business van insurance: don’t buy more coverage than you actually need! According to the "RAC", many drivers are over-insured and the cost of this mistake can rise very quickly. For instance, if your tools are covered as part of your business insurance, you don't need an additional "tool protection" coverage. Although proper coverage is important, your business van insurance will be a major expenditure and you should avoid paying more than you need to – this matters all the more, as you set out on your grand entrepreneurial adventure!