Having the right insurance for your business van is crucial. Without proper coverage, one accident could leave you unable to work or facing serious financial consequences. In this guide, we’ll walk you through the key types of business van insurance, what’s typically covered and not covered, how much it costs, and tips for getting the most suitable policy to protect your livelihood on the road.
Types of Business Van Insurance
Carriage of Own Goods
If you’re a sole trader or self-employed, chances are you’ll need “Carriage of Own Goods” cover. This protects tools, equipment, and stock inside your van that you use for work. For example, if you’re a plumber, it covers your tools and spare parts. If you’re attending markets to sell your homemade crafts, it ensures your display stands and inventory too. It’s sometimes called “Carriage of Tools” cover and it’s essential if your van is your mobile business hub.
Carriage of Goods for Hire and Reward
Do you transport items, parcels, or deliver takeaways for a living? Then “Carriage of Goods for Hire and Reward” is the policy you need. It covers you and your contents when carrying other people’s possessions in exchange for payment. So if you carry out contracted courier work or food deliveries in your van, this vehicle insurance provides protection as you drive between destinations with customers’ goods on board.
For long distance or heavy load deliveries, “Haulage” insurance is designed for the job. If you’re contracted to transport large items or make an interstate delivery, haulage cover ensures you’re protected for the long haul journey. It’s niche insurance for niche transportation needs.
Levels of Cover
Van insurance policies come with different levels of protection. Let’s compare the main options so you can decide what’s right for your business.
Third Party Only
The legal minimum coverage protects other parties only. It handles damage you cause to others’ property and covers others’ medical bills if you injure them. But there’s no cover for your own van, equipment, or injuries. It’s the most basic protection available.
Third Party Fire and Theft
A step up, this adds limited cover for your own van too. You’re protected if your van is damaged by fire or stolen. But there’s still no cover for collision damage, windscreens, or property inside the vehicle.
As its name suggests, this is the most complete coverage. It handles third party claims like the above policies, plus covers damage to your own vehicle. You’re protected for fire, theft, crashes, vandalism, and more. For maximum peace of mind, it’s the preferable choice.
What’s Not Covered
While business van policies are extensive, some things may fall outside the scope of coverage:
- Wear and tear – Gradual deterioration from regular use isn’t included.
- Mechanical or electrical failure – Routine maintenance and breakdowns aren’t covered.
- Theft of unsecured items – Leaving equipment unattended and unsecured often voids theft claims.
- Uninsured goods – Not having the right cover for what you’re transporting can rule out claims.
- Personal use may be excluded – Some policies only operate during business hours/use.
Policy Add-Ons and Optional Extras
Tailor your business van insurance to suit your needs with these handy bolt-on options:
- Legal/motor legal protection – Get help with legal costs if you need to claim.
- Windscreen cover – Repair or replace damaged windscreens without affecting your no claims bonus.
- Misfuelling cover – We’ve all made mistakes at the pump! This covers draining and repairing damage.
- Lost keys cover – If you lose your keys, replacement and re-coding costs are taken care of.
- Courtesy vehicle provision – Guaranteed access to a temporary van keeps your business rolling.
Choosing the Right Van for Your Business
The vehicle you rely on day in and day out for your business should be suited to your needs. When selecting a van, be sure to carefully assess how much cargo space you require. Measure items you’ll regularly transport and consider potential future business growth, but don’t overspend on an unnecessarily large van. Check the van’s maximum cargo weight allowance suits the heaviest loads you’ll be hauling. Heavier equipment requires higher payload capacity.
Choose a van where you can easily load and unload frequently without strain. Opt for wide rear doors and a low load floor for accessibility. Fuel efficiency is also key – choose an economical engine size, or consider electric and hybrid vans that offer fuel savings despite limited range.
Since you’ll be spending long hours driving, pick a van that’s ergonomic and fitted with driver assist and alert features to reduce fatigue and accidents. Consider whether you can modify the van to perfectly suit your workflow with customized racking, storage, shelving and workbenches tailored to your trade to keep things organized for productivity.
In terms of budget, look beyond just the purchase price and consider total lifetime costs including insurance, maintenance, fuel economy and resale value, all of which impact overall affordability. Financing options like lease-to-own schemes can assist cash flow when acquiring your business van.
Buying New vs Used/Second-hand Vans
When acquiring a van for your business, deciding between new or used depends on weighing up the pros and cons. New vans come with full warranties and roadside assistance for peace of mind. They can be customized to your specifications before purchase, offer the latest designs, features and efficiencies, have no existing wear or damage issues, and tend to hold their value well when re-selling later.
However, used vans cost significantly less to purchase upfront since depreciation has already taken its biggest hit. They often have low mileage and plenty of working life left. Buying used lets you pay outright if unable to secure finance, brings cheaper insurance costs, and allows reviewing existing maintenance history.
To make the most informed choice, carefully inspect any used vans prior to purchase or have a vehicle inspection done. Ask to see log books verifying mileage and service history. Weigh up the importance of warranty coverage for your situation. And be sure to calculate total lifetime running costs, not just upfront purchase price, when determining the most budget-friendly and practical option for your business van purchase.
Van Maintenance Best Practices
To avoid disruptive breakdowns, proper servicing and maintenance of your van is crucial. Be sure to follow the manufacturer service schedule, never extending intervals beyond recommended mileage or timeframes. Conduct regular safety checks like daily inspections of tires, lights, oil and coolant levels.
Keep the van clean inside and out to remove dirt and debris that causes wear and corrosion, especially on the underside. Use only the manufacturer’s specified oils and parts to keep your van operating reliably. Keep the interior clean since your van is your mobile office and should remain professional. Check fluid levels often between services to avoid low oil, brake fluid or coolant. Rotate tires regularly so they wear evenly and extend tire life. Invest in locks, immobilizers and tracking to help secure your van and prevent theft of your precious workhorse.
Address any minor damage like small dents immediately to prevent bigger issues with rust and seals developing later. And keep detailed maintenance logs to identify patterns and optimize service intervals. Having a trusted vehicle mechanic periodically inspect your van provides an extra preventative layer on top of your own diligent care.
Transitioning From Personal to Business Van Insurance
Many sole traders begin working from their existing family car or van with personal insurance cover. At some point this needs to transition across to specialist commercial vehicle protection once the van becomes vital for business activities. Personal policies exclude business activities like carrying tools or getting paid for delivery services
For example, Prampicks.com provides stroller reviews, so transporting product samples would require proper business cover. Driving predominantly for contracted work makes a vehicle qualify as a ‘business van’ needing proper commercial cover. If you happen to claim against a personal policy for a business-related incident, you could have the claim denied and the policy canceled. Business cover widens protection to properly insure all your work-related driving risks, allowing you to carry tools, make deliveries, and display signage or branding.
Notify your insurer as soon as your usage profile shifts so they can update your policy to the right business van cover. An insured driver listed on your existing personal policy can typically switch their no claims bonus discount across to the new commercial policy. Strict penalties apply for not having valid business cover while operating commercially, so make the switch once you begin relying on your van for work to keep your livelihood properly protected.
Business vs Private Van Insurance
When deciding on van insurance, it is important to consider whether a business or private policy makes the most sense for your needs. If you use your van commercially for deliveries, carrying tools, or other work activities, you will require a specialized business van insurance policy that allows for this type of usage. Private policies are more limited and designed for social activities like shopping trips or weekend getaways – they do not provide coverage if you rely on your van for commuting to a job site or contracting work.
Ultimately, any commercial use requires appropriate business van insurance that meets all legal requirements. Having inadequate coverage could be a risky proposition. The bottom line is that if your van is vital for your livelihood, opting for business insurance is the prudent choice.
Keeping your business van properly insured delivers valuable protection you can’t afford to be without. Evaluate your coverage needs, shop around for competitive quotes, and review policies annually as your business evolves. Investing in the right insurance coverage means you can hit the road with confidence, knowing you’re protected.
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