Company Car Insurance

A company car is a vehicle that is made available for the use of an employee by their employer, as an employment ‘perk’ or ‘benefit’; a company car is defined by the taxman as any vehicle that is mechanically propelled on roads – exclusions are those whose purpose is to carry goods, and motorcycles.

1.6 million workers take advantage of this perk that includes running costs, maintenance, and often free or subsidised petrol costs. Whether the employer pays for the company car insurance or not, does depend on each individual firm though.

Some firms will take on ‘fleet insurance’ to insure all of their vehicles in bulk under one policy, but others will require that you source and implement your own insurance for the vehicle. Those firms that have shifted the responsibility for making sure adequate company car insurance is in place to the employee can still find them selves exposed to liability where an employee is using a company owned vehicle, but are able to minimise this risk considerably by taking precautionary measures: The employer can regularly check with the employee that the company car insurance held is sufficient; that the policy includes ‘business use’, and that if there is a potential that the vehicle will be used by other employees, that the business use extends to these extra drivers.