Do I need a commercial or private van insurance?

single van

Finding the right van insurance is essential to any van owner, but how do you know you’re getting the right cover? Have you considered that you could be invalidating your insurance by having the wrong cover?

Whether or not you require a private or a commercial policy, as per the Road Traffic Act 1988, having van insurance is a legal requirement.

This guide aims to help provide information which could help you when considering your business insurance needs.

Commercial van policy

Some van owners may assume that commercial insurance only applies to self-employed drivers using their vehicle to transport tools from one job to the next, or if there vehicle is used for haulage/courier use.

Commercial vehicle insurance can actually cover a far broader spectrum and is also required by employed individuals who drive their vans to and from a sole place of work including those who have various work destinations.

For example, if you’re a tutor and you use your van for personal use, but still drive to and from work; you could require a commercial vehicle policy.

There are three business policy classifications:

1.   Carriage of own goods (COG): This classification can indemnify drivers carrying tools and equipment related to their business, trade or profession to one or more place of work.

2.   Carriage of goods for hire and reward (CGHR): This is sometimes referred to as courier insurance. This classification can indemnify drivers carrying and delivering other people’s goods and making multiple drops.

3.   Haulage: This classification can indemnify drivers carrying and delivering other people’s goods and making a maximum of three drops.

It’s worth noting that these classifications may only indemnify the use of the vehicle, if you wish to insure the goods within the vehicle, you may wish to consider a goods in transit policy.

Private van policy

With a car policy where there are generally two subcategories:

  • Social, domestic and pleasure including commuting
  • Social, domestic and pleasure excluding commuting

However, with a van policy, there is only one category:

  • Social, domestic and pleasure only (SDP)

It’s worth noting that unless you use your vehicle for social, domestic and pleasure only, it is likely that you will require a degree of commercial cover.

For example, if you have hobbies including fishing, camping, surfing, domestic gardening or anything that isn’t classified as as ‘work’ this will fall under the SDP category and you shouldn’t require a business policy.

However, if the use of your vehicle involves any sort of payment or income, for example DJ’ing or personal training, then the likelihood is you will need a business policy.

You will also need commercial insurance if you receive payments or income from your hobbies. The waters muddy a little when you use your vehicle for car boot sales.

Although when you are participating in a car boot sale, you are technically receiving payment/income, but you may still only require a private policy.

The reason for this is that you may rarely participate in a car boot sale and it may still be considered a social activity.

However, if you regularly participate in car boot sales, you will require a commercial policy. if you are unsure of what is classified as regular participation, you should contact your insurer for clarification.

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Van and Vehicle Insurance

This guide is part of our series related to van and vehicle insurance, for more guides, or to get a quote, head over to our van insurance section.