Contractors’ Questions: Do I need business use for my car insurance?

Contractor’s Question: If I use my car for travelling to and from a client’s site, would ‘SDP’ (Social, Domestic, Pleasure) and Commuting cover be sufficient for my car insurance, or must it have ‘Business Use’ too?

Expert’s Answer: The answer to your query is ‘yes’ it is sufficient to just have SDP + Commuting, but only if you are permanently based at your client’s site. If your permanent place of business is (for example) 88 Bloggs Street in London and you visit the client in Birmingham, you need to have SDP and Commuting plus Business Use in connection with your business, or the business of your employer or partner.

The reason for this is ‘Commuting’ only covers you to and from your permanent place of business. If you travel as part of your job, you need to be covered while travelling on behalf of your employer and, as most policies are based upon a Statement of Fact to calculate the premium, you will need to pay your insurers the appropriate premium based on the correct declaration.

In my view, insurers’ thinking is that if you commute to one place of work, your car is likely to be out of use during working hours thus meaning less likelihood of a road traffic collision. And if you commute to a number of appointments, you do more miles in your car, you are probably at more risk of having an accident if you are on the road more frequently, and you are also claiming mileage allowance based upon paying an increased insurance premium.

Also, if you had an accident en route to your client's site and just had SDP + Commuting cover, in theory your insurers could refuse to pay the claim for Accidental Damage (but note, they cannot refuse to pay a claim for Third Party Damage). 

The expert was Helen Hall, private client executive at Caunce O’ Hara.