Many kinds of companies rely on sending employers out in company-owned vehicles to visit clients, generate new business, carry out jobs or transport goods and materials. If your company has more than one car, van or other vehicles that are used primarily for business use, fleet insurance can protect them all together under one policy.
It’s a legal requirement to have insurance for any road vehicle in the UK. Keeping track of the renewal dates and policy features of a high number of company-owned vehicles can be an administrative nightmare, particularly when you factor in all the employees who could be driving them. This is where a fleet insurance policy can protect your vehicles/drivers and save on administration, this guide will get you up to speed on fleet insurance in the following sections:
- What is fleet insurance?
- What is covered by fleet insurance?
- Types of fleet insurance
- Do I need fleet insurance?
- How much cover do I need?
- How much does fleet insurance cost?
- How to find a fleet insurance provider
- Final thoughts & FAQs.
What is fleet insurance?
Fleet insurance is a type of vehicle insurance policy which can cover multiple commercial vehicles. It’s designed for businesses that use company-owned vehicles in the company in some way – whether that’s issuing company cars to employers, or businesses whose daily operations rely on employees driving company vans to various jobs throughout the day.
Motor insurance is a legal requirement for any vehicle on the road in the UK. Having a fleet insurance policy in place helps companies remain legally complaint, mitigating the risk of leaving any cars or drivers accidentally uninsured.
One of the main attractions to a fleet insurance policy is that it has one renewal date for all insured vehicles, as well as a single payment date/s. Consolidating insurance policies for a whole fleet makes it far easy to manage a high number of vehicles while reducing a company’s time spent on admin.
On top of being easier to manage, fleet insurance can save companies a significant amount of money. By bulk buying motor insurance from a single provider, companies tend to receive substantial discounts, compared with purchasing separate policies for each vehicle from various insurers.
How many vehicles constitute a fleet?
The number of vehicles considered a fleet varies according to the provider, but companies can typically find a fleet insurance policy for as little as two vehicles. Many providers limit cover to a maximum of 500 motors, but extensive policies can cover fleet sizes of several thousand for larger enterprises.
What is covered by fleet insurance?
Fleet insurance products are available for most vehicle types, including cars, vans, buses and trucks. Many insurers cater to fleets which feature an assortment of vehicle types under what’s known as an ‘any vehicle’ policy, which can be particularly useful for companies that use different vehicles for different purposes, or for larger fleets where vehicles are likely to change throughout the life of the policy.
Generally, a fleet insurance policy offers similar coverage to a standard car or vehicle policy, alongside some additional features designed for business purposes. A fleet insurance policy can cover claims relating to any of the following, depending on the level of cover you choose:
- loss or damage to your vehicles
- vehicle recovery in the event of an accident or breakdown
- legal fees
- damage to the windows or windscreens
- replacement locks should your keys be stolen
- support towards medical expenses should you or a passenger sustain an injury in an accident in an insured vehicle.
- driving abroad, usually with a maximum limit of days allowed per year
- protection for any personal belongings lost or damaged in an insured vehicle
- trailers attached to a vehicle insured under the policy
- the use of a courtesy car while the insured vehicle is in for repair
- breakdown cover.
These features tend to be available from most fleet insurance providers, either as standard or as optional extras which you can add to your plan for an additional fee. Which aspects of cover appear on a fleet insurance policy largely depends on the level of motor insurance a company chooses. There are three typical categories of fleet insurance: third-party only, third party, fire and theft, and fully comprehensive, explored in detail later on.
Are there any typical exclusions?
It is worth checking with insurers to determine which specific vehicles are covered, as typically motorbikes, forklift trucks and excavators are excluded. Insurers also tend to reject any vehicles insured under a separate, private policy, or vehicles not registered in the UK. Similarly, fleet insurance policies cannot cover all types of claim. Some common exclusions to watch out for are:
- vehicle theft due to the driver’s negligence, such as leaving the vehicle unlocked
- damage to the tyres or body underside
- mechanical breakdown.
Types of fleet insurance
Fleet insurance is relevant to a broad range of business types, spanning most sectors. Companies in different industries use their vehicles in different manners and for varying purposes, and their requirements for cover vary hugely as a result. As such, there are several types of fleet insurance on the market which can cater specifically to particular industries.
Taxi fleet insurance
Taxi firms for public or private hire can have vast fleets, which tend to consist of an assortment of vehicle makes, age and condition. These variables affect the value of each car, which makes it difficult to evaluate the overall risk.
What’s more, taxi drivers spend their entire working day on the road, which bumps up the risk of the driver’s involvement in an accident and increases the likelihood of incurring day-to-day damage to the vehicle. A taxi fleet insurance takes into account the increased risk for taxis and can also offer specialist cover features for carrying passengers.
Light goods fleet insurance
Light goods vehicles, sometimes known as light commercial vehicles, are typically commercial carrier vehicles with a gross weight below 3.5 tonnes. These can include box vans, Luton vans, flatbeds, tippers, pick-ups, fridge trucks and more. If the majority of the vehicles in your fleet fall into this category, you could benefit from a light goods fleet insurance policy.
As these types of motor are often used by construction, plumbing and electrical engineering companies, specialist elements of cover can include protection for common tools and equipment transported in light goods vehicles, such as building materials and scaffolding. Many light goods fleet insurance providers can also offer an extension to include vehicles up to 7.5 tonnes, despite their DVLA classification as heavy goods vehicles (HGVs).
Minibus fleet insurance
Companies using fleets of minibuses tend to be airport transfer providers, charities and not for profit organisations, clubs and associations and even nursing homes. Minibus fleet insurance can cover businesses working in the passenger transport industry with three or more minibuses with 8-17 passenger seats, or a mixed fleet including coaches and cars, with cover also available for minibuses adapted for disabled access.
For-profit businesses, those who charge for their customer transportation services, must ensure that their drivers hold the relevant specialist driving license, such as the Category D1 PCV license. These specialist licenses are a legal requirement for commercial minibus drivers, and companies will need to prove that their drivers hold the appropriate, valid license to obtain minibus fleet insurance.
Business fleet insurance
Business fleet insurance is a more general, flexible fleet insurance policy which can cater to a range of businesses, using their vehicles for different purposes.
Those issuing company cars which employees use for commuting require different cover to private ambulances, for example. This type of policy can offer protection for a range of drivers, a medley of vehicles and varied uses. Many insurers sell just one fleet insurance policy, with specialist cover for specific industries available as add-ons to the standard business fleet insurance policy.
Hazardous goods fleet insurance
Companies which use a fleet of vehicle to transport hazardous materials, such as chemicals, toxic waste, explosives, corrosive fluids, radioactive materials or biological waste, will need to comply with numerous laws and industry regulations. Hazardous goods vehicles are often, but are not restricted to, LGVs, flatbeds, tankers and other lorries, but can also include cars or vans if they are used for the same purpose.
Carrying these kinds of goods carries enormous risk. Should a vehicle carrying dangerous cargo be involved in a road accident which exposes the hazardous products, these could cause significant damage, destruction, contamination, and even death. Not only does this elevate the safety risk for other road users, the driver and the environment, it also increases the likelihood of lawsuits in the case of an accident. A specialist hazardous goods fleet insurance policy can factor in these high-risks, providing tailored cover suitable for the nature of your cargo.
Haulage and courier fleet insurance
Businesses in the transport and logistics industry which deliver and collect goods around the country may choose specialist haulage and courier fleet insurance. Courier and haulage fleets run a significant risk owing to the increased amount of time they spend on the road. Vehicles carrying goods of this nature also tend to be at higher risk of theft.
Haulage and courier fleet policies can combine Goods in Transit insurance, which is designed to protect business items transported from one place to another from theft, loss or damage. Other features typically combined with haulage and courier fleet insurance are public liability insurance and employers’ liability insurance. These can either come under an all-encompassing policy or as part of a package insurance deal suitable for companies in the haulage sector.
Do I need fleet insurance?
It’s a legal requirement to insure any vehicles you have on the road. If you use cars or vehicles as part of your business, it’s therefore imperative that you take out at least the minimum level of cover on every company vehicle. You don’t have to take out a fleet insurance policy – you can choose to insure each motor individually if you prefer.
Many small to mid-sized enterprises with substantial fleets may find fleet insurance an essential, not having the resources in house to manage tens to hundreds of insurance policies. For even larger corporations, keeping track of hundreds of vehicles and implementing the same level of cover for each can be near on impossible, leaving the motors, drivers and other road users at risk. Taking out a single policy for all the vehicles in a fleet is the only way to ensure that they all have identical levels of cover, making sure none are left short.
Do I have to take any measures before taking out a fleet insurance policy?
Businesses must ensure that if they are using vehicles for their business operations, that they fulfil all the relevant safety laws and requirements. Different rules apply to companies in different sectors, with specialist laws on carrying particular high-risk cargo, such as biological waste. Similarly, if your employees drive unusually large or non-standard vehicles, they may need a special license for this. Be sure to check your legal obligations when it comes to owning and operating commercial vehicles on the government website.
One of the most important things to bear in mind when you own a fleet is that your vehicles must be recorded on the Motor Insurance Database (MID), a central government record showing details of all insured vehicles in the UK. By law, you must provide up to date information on all the vehicles in your fleet. If you fail to do this, you risk your vehicles being impounded, or you risk having to deal with claims unrelated to your drivers. Some insurance companies will update the MID automatically on your behalf when you notify them of any changes to vehicles in your fleet. Still, it is your responsibility to check that the information on the MID is correct.
How much cover do I need?
There are three basic levels of cover available for motor insurance. The lowest level constitutes the legal minimum for all UK motors, which applies to commercial fleets, too.
However, there are two higher levels of cover that offer added protection for more eventualities. The level of cover you need depends on how exposed your vehicles are to the various risks covered, as well as whether your company could absorb the costs of uninsured incidents.
Third-party only
Third-party only insurance is the minimum level of cover required by law for vehicles in the UK and can cover the policyholder against third party damage or injury, in the event of an accident deemed the policyholder’s fault. Third-party claims can relate to injuries to members of the public and other drivers caused by an insured vehicle, as well as damage to third party vehicles or property.
It’s the cheapest form of fleet insurance available, but it’s crucial to note that it won’t pay out for damage to the insured vehicles or your drivers if they sustain an injury in an accident. You would, therefore, be liable for covering the costs of any repairs to your fleet.
For example, if an employee were to drive into the back of somebody, this policy could pay out for the repair costs for the other car and the injury compensation to the other driver. Similarly, if they reversed into somebody’s garden wall, this policy could cover any rebuild costs for the wall. Any damage sustained by your vehicle would come out of the company’s pocket.
Third-party, fire and theft
Third-party, fire and theft, often abbreviated to TPFT, can protect you against injury or damage to third parties and their vehicles and property in an accident. The addition of fire and theft can protect you against any costs incurred from fire damage, accidental as well as arson, and claims relating to theft or attempted theft. If the car suffers damage due to an attempted robbery, such as a broken window or stolen radio, the policy can typically pay for the repairs. Should your vehicle be stolen, the policy can replace the entire car.
There’s no legal obligation to take out this type of policy, but it can save you substantial amounts of money against the costs for expensive repairs and vehicle replacement for these types of claims.
Fully comprehensive
As the highest level of cover on the market, fully comprehensive cover is the most expensive of the three types of fleet insurance policy. Not only can it protect you against theft, fire and third-party injury and damage, but it can also cover damage to your company-owned vehicles and drivers. If an accident is the fault of the insured driver, this type of policy can still pay out for the repairs to the insured vehicle, or even replace the car if it’s written off entirely.
Comprehensive cover can also pay out in instances where you cannot prove the person at fault, such as employees returning to the vehicle and finding that someone has hit the car and driven away. This extended level of cover can be especially useful for businesses owning large fleets, offering peace of mind that the policy can account for the repair and replacement costs in many instances. Comprehensive cover also tends to include extra features of protection as standard, such as legal cover, though this varies between providers.
How much does fleet insurance cost?
Many factors play into how much you pay for your fleet insurance policy. The premium largely depends on the level of cover you choose to take out, the types of vehicle you want to insure and information on the drivers that you have in your policy. Of course, the more motors you insure, the more you will tend to pay.
Insurers gauge their level of risk by asking you a series of questions on the vehicles you want to include on the policy. The information you have to provide typically includes:
- how many vehicles you have in your fleet
- what type of vehicles they are
- how old they are
- the condition of the vehicles
- how often the vehicles are in use
- what they are used for
- where they are kept overnight.
If you opt for a comprehensive level of cover, you typically have insurance for your drivers as well. If this is the case, the insurance company usually wants detailed information about the drivers on your policy to create a bespoke quote. Factors related to the drivers, which may affect your premiums include:
- whether you want an Any Driver policy or a Named Driver policy
- the number of drivers on the policy
- the age of the drivers
- any previous driving convictions of any of the drivers.
If you want to name drivers on your policy, you have to provide information about each employee that may drive your vehicles, including their age and claims history.
How to lower your premiums
Vehicle insurance is notoriously expensive, and fleet insurance is no different. That said, putting in some time and effort in certain areas can have significant effects on fleet insurance premiums. The most effective way for a fleet manager to secure a better deal is to cultivate a strong safety culture within the company, as insurers can offer reduced prices for fleets they consider to be of lower risk. Safety measures to consider include:
- monitoring your claims history. You can request a copy of your claims record from your broker so that you can analyse your company’s claims history and look for any patterns. If there’s one type commonly appearing, or multiple claims by one driver, consider providing your employees with extra training.
- securing vehicles overnight. If you can show that your vehicles are secure when they’re not in use, you may be able to reduce your premiums. Consult your insurer to find out what measures they look on favourably when it comes to reducing the risk of vehicle theft or vandalism damage.
- restricting your fleet to named drivers. One of the most effective ways to reduce your premium is to name the drivers. An ‘Any Driver’ fleet policy offers fantastic flexibility but will typically bump up your premium as the insurer has no information on how risky the drivers are. Insurers consider drivers under 25 higher risk.
- conducting regular maintenance. Encourage your drivers to carry out daily checks on the oil, brake pads and tyre pressure. Keep a service record to identify any issues early on and to keep your vehicles in the best possible condition.
- Some companies choose to make drivers responsible for paying their excess fees as an incentive to drive safely. An alternative option is to introduce a bonus for staff who don’t need to make a claim, which can encourage safer driving habits.
- adding trackers. Using a tracker can help reduce your premiums, as you will always know where your vehicles are, which encourages drivers to use them responsibly. A black box allows the insurer to assess how safely your employees drive, which can work favourably for your premiums.
- regular training. All your drivers should have regular safe driving courses. Training courses can help your employees drive in a fuel-efficient manner, learn how to drive safely in different weather conditions and spot hazards.
- reducing the features of cover included on the policy. If any elements aren’t relevant to a company’s specific business use, it can be worth removing these features for a reduced price.
- choosing to pay annually rather than monthly. Most long-term payment plans tend to work out more expensive.
- establishing a strong relationship with your fleet insurance provider. This can save you more money in the long run than chopping and changing supplier. Insurers can become actively involved in your business risk management, working with you to implement measures that can mitigate risks to the insured vehicles as well as your drivers’ risk to other road users.
How to find a fleet insurance provider
Fleet insurance is a specialist type of commercial insurance policy, which means it isn’t available through all insurance providers. Businesses will have to shop around for a provider which specialises in either vehicle insurance or commercial insurance. Next, the best way to find a policy is to establish which core features of cover you require as standard, which will enable you to make fairer, like-for-like comparisons between multiple products.
Approaching insurers directly for a quote
The simplest way to find a fleet insurance policy is to approach insurers directly. You may have had a good experience with a particular provider and wish to take out a policy with them straight away, but it’s always a good idea to obtain as many quotes as possible to find the best deal. Commercial insurance providers or specialist vehicle insurers are your best bet when it comes to finding a fleet insurance policy, as they can provide specialist protection suitable for fleets in various industries.
Many providers detail their fleet insurance products on their website, though it may be best to call for an accurate quote, owing to the complicated nature of a fleet insurance product. For this reason, many providers only offer fleet insurance policies through a broker.
Brokers
Brokers are industry experts, familiar with all the types and levels of cover available. Fleet insurance solutions have to accommodate a tremendous range of variables, featuring multiple drivers and sometimes 500 vehicles or more of different makes and ages, which is why going through a broker can make the process easier. They can find you exclusive deals which are not advertised to the public. Many of these deals come with lower prices or more extensive cover than you could access as a direct customer.
Even after taking their cut of commission, you may find yourself with a cheaper deal than had you organised cover yourself. Going through a broker also offers the added security of having an intermediary on your side, who has the expertise, knowledge and experience to support you when dealing with your insurer in the event of a claim dispute.
Comparison sites
Comparison sites are a useful way to begin a search for any type of insurance, as they can show you products from a broad range of insurance providers. They offer the option to set filters to show you the kind of insurance you want or to restrict your search to specific providers or features of cover.
Final thoughts & FAQs
Insurance for your vehicles is a legal requirement, and fleet insurance is a way to simplify this process for businesses with multiple company cars, vans or other vehicles. Having a single policy and a single renewal date takes the headache out of vehicle insurance administration, saving companies valuable time and money.
Almost all drivers will have a bump of some kind over their lifetime, but when a business is involved, a simple claim can turn into a larger legal dispute.
Whether vehicles are an integral part of your business operations or an added perk for the management team, having the right insurance in place can protect other road users, your valuable capital assets and your employees. Fleet insurance policies are designed to shoulder the costs of expensive vehicle claims, keeping your business on the road when things go wrong. Still have questions? Check out some common queries below.
Can I change the vehicles on my policy?
Yes. Insurance providers typically allow you to modify the policy over the policy term, whether that’s removing or adding vehicles. It’s common practice for companies using large fleets to change their cars around regularly, due to wear and tear or fluctuations in demand. You must make sure that you update your policy every time you make any changes to your fleet, or you risk invalidating your policy and leaving your business uninsured.
Will a fleet policy cover my drivers to drive other vehicles?
No. Fleet insurance policies are limited to the vehicles that you specify under the policy. If your employees or any named drivers are involved in an accident in another car, a fleet insurance policy cannot cover the claim or any costs of damage, injury or compensation.
What is the DVLA fleet scheme?
The DVLA fleet scheme is a government-backed initiative aimed to help companies deal with the administrative burden of operating a fleet of vehicles. Companies with a fleet of 50 or more vehicles can join the scheme for free, where they can benefit from a range of services designed to ease the management of a larger fleet. To join the programme, you can contact the Commercial Vehicles Team by phone or email through the government website.
Scheme participants have access to a dedicated helpdesk via phone and email for support and guidance for fleet-related queries and access to View Vehicle Record where companies can easily access information relating to a vehicle in their fleet online. Other perks include bulk despatch, bulk processing and bulk taxing so that fleet managers can deal with the registration certificates and tax of multiple vehicles in one transaction.
Can a fleet insurance policy cover drivers with convictions?
Some insurers can cater for drivers with convictions. However, you must refer any drivers with serious convictions on their drivers’ license to the insurance company before you permit them to drive an insured company vehicle, or you risk leaving your drivers underinsured or invalidating the policy entirely. Insurers recommend that fleet operators take photocopies of all their employees’ driving licenses at least once a year, and carry out regular, thorough licence audits.
What is a declaration fleet policy?
This kind of policy is designed for businesses that use vehicle fleets that change regularly. Instead of having to inform the insurer each time you change a vehicle on the policy, companies with a declaration fleet policy can opt to report any fleet changes in a quarterly, half-yearly or annual declaration instead. The policy can cover any vehicle purchased, acquired or removed by the company in the meantime without the business having to notify the insurer officially. The premiums are adjusted after the company makes each declaration.
What about a director’s vehicles?
Provided the vehicle is registered to the director personally, a director’s vehicles can typically be included on a company fleet policy, but you must check with your specific insurance provider. However, directors must declare these vehicles to the insurer and provide a special motor certificate showing the name of the registered owner.
Does my business have to own the vehicles to add them to a fleet policy?
If your business leases vehicles under a lease agreement, you can typically add these vehicles to a fleet insurance policy. That said, you should always check the specific terms of your insurance provider to ensure you have adequate cover for all your vehicles.