Business car insurance is commonly arranged when a vehicle is used regularly for work, such as carrying tools, visiting job sites or making deliveries. A personal car policy is generally designed around private driving. Where work use is occasional, some personal car policies may allow it if the insurer accepts it.
Business car insurance, also called commercial motor insurance, is designed to cover a vehicle used for business, such as a work ute or delivery van. Cover levels commonly include comprehensive car cover and two third party options. Commercial motor insurance is a retail product, so it comes with a Product Disclosure Statement (PDS).
Cover depends on the policy and insurer you choose. Check the policy wording and its terms and conditions for what is and isn't included.
Business car insurance vs personal car insurance at a glance
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How is business car insurance different from personal car insurance?
The main difference between business car insurance and personal car insurance is how the vehicle is used. Each insurer defines "business use" in its own PDS, and the definitions vary between insurers.
Insurers commonly ask how a vehicle is used when you apply and again at renewal. Client visits, daily tool runs, paid deliveries and employee drivers are uses that commonly change the answer. If a claim happens during a use the insurer was not told about, a personal car policy may not respond.
Whether occasional work trips sit within a personal policy varies between policy wordings, so always check with your broker or the team at upcover.
When is personal car insurance enough for work use?
Personal car insurance may be enough where business use is occasional and the insurer has accepted it. The setups below show the questions that commonly decide which way it falls.
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If deliveries are a large part of your work, see upcover's guide to delivery driver insurance in Australia.
When do businesses commonly arrange commercial motor insurance?
Businesses commonly arrange commercial motor insurance when a vehicle is used mainly for work, carries signage, goods or tools, or is driven by employees.
A business with several vehicles may consider fleet insurance. Fleet insurance puts several business vehicles under one policy with one renewal date, commonly from a minimum vehicle count set by the insurer. See upcover's guide to what commercial motor fleet insurance is.
How does business car insurance work for utes and vans?
Utes and vans used for work are commonly insured under a commercial motor policy. They often carry tools, stock or customer goods and are often driven by employees. Signwriting, racks and other fit-outs may need to be declared to the insurer so they are noted on the policy.
The vehicle, the tools in it and the goods it carries are commonly insured under different covers. Commercial motor insurance is designed to cover the vehicle. Tools of trade insurance is designed to cover tools and equipment you carry to jobs against insured loss or damage, such as theft.
Marine cargo insurance is designed to cover goods while they move by sea, air, road or rail, from pickup to delivery, against loss or damage. upcover's page on insurance for light commercial vehicles shows the covers businesses with utes and vans commonly arrange.
What do claims look like for work utes and vans?
upcover's light commercial vehicles page includes two hypothetical examples for work utes.
Hypothetical example: Vehicle towing
Your employee is driving a light commercial ute to a customer job when another vehicle hits the side of the insured vehicle at an intersection. The ute sustains damage and needs towing from the accident scene to a repairer.
How cover may respond: Commercial Motor Vehicle insurance may respond to towing costs for your insured vehicle following an accident.
Hypothetical example: Boom gate collision
Your employee is driving a light commercial ute to a job in a city office building. While entering the underground car park, the vehicle strikes the boom gate arm and damages the gate mechanism. Building management sends your business a demand for repairs.
How cover may respond: Commercial Motor Vehicle insurance may respond to third party property damage claims arising from the operation of your insured vehicle.
Important: Claims scenarios are hypothetical examples only. Cover is always subject to policy terms, conditions and exclusions. Policy wordings may also vary between insurers. Always refer to the policy wording and its terms and conditions for details.
If you're concerned about a particular incident, you can always consider telling your insurer as soon as you become aware of an incident, complaint or circumstance that could lead to a claim. You don't need to wait for a formal demand. Also keep in mind that notifying of a claim late may affect your claim.
You can start a claim through the make a claim page. Admitting liability, incurring costs or agreeing to a settlement before you notify your insurer may affect your claim. Starting a claim does not confirm that your claim is covered; your insurer assesses it under the policy terms, conditions, exclusions and limits.
What does business car insurance cover?
Business car insurance is commonly arranged at one of three cover levels, and each level is designed to respond to different events. Moneysmart, run by ASIC, describes the same three levels in its guide to types of car insurance.
- Third party property damage: designed to cover damage your vehicle causes to other people's cars or property. It does not cover damage to your own vehicle.
- Third party property damage, fire and theft: designed to cover the same damage to other people's property. It is also designed to cover your vehicle if it is stolen or damaged by fire.
- Comprehensive: designed to cover damage to your vehicle and to other people's cars or property, subject to the policy terms.
Depending on the policy, cover may include towing after an accident and windscreen and glass damage. Legal liability for damage to other people's property is subject to the specified limit, the most the insurer may pay. upcover's guide to what commercial motor insurance covers in Australia explains the levels in more detail.
What does business car insurance not cover?
Exclusions commonly include, but are not limited to:
- intentional damage
- driving over the legal alcohol or drug limit, or refusing a breath test
- unlicensed drivers
- mechanical breakdown and wear and tear
- use the insurer was not told about, such as paid delivery, courier or rideshare work under a general business use policy
- injury to people, which generally sits with compulsory third party insurance
- tools, stock and customer goods beyond any limited benefit in the motor policy, which commonly sit with tools of trade or marine cargo insurance
Important: This list is not exhaustive. Exclusions vary between insurers. Always refer to the policy wording and its terms and conditions for the exclusions that apply to you.
Does compulsory third party insurance cover a work vehicle?
Compulsory third party (CTP) insurance is designed to cover injury to people caused by your vehicle. CTP is tied to vehicle registration, so it applies to registered work vehicles as well as private cars. The ACT Government notes that CTP insurance is compulsory in every state and territory in Australia.
CTP does not cover damage to cars or property, according to Moneysmart. Damage to your own vehicle and to other people's property sits with business or personal car insurance. How CTP is paid differs by state and territory.
Swipe left or right to see the full table.
For the Northern Territory, check with the territory's registration authority.
What affects the cost of business car insurance?
The cost of business car insurance depends on several factors, and insurers weigh them differently. Moneysmart lists how often and how far you drive, where you live and where you keep the vehicle.
Other factors commonly include:
- the type, age and value of the vehicle
- how the vehicle is used, such as deliveries, client visits or carrying tools
- who drives it, including employees, and their driving history
- your claims history
- the cover level and excess you choose, where the excess is the amount you pay towards a claim
For figures, see upcover's guide to how much commercial motor and fleet insurance costs.
How upcover can help
upcover arranges commercial motor and fleet insurance for Australian businesses with work cars, utes and vans. upcover works with 80+ insurance partners and can arrange quotes from a range of insurers.
- 70,000+ businesses covered
- 4.9/5 customer rating
- Certificate of currency available once your policy is confirmed
An upcover representative or a broker can talk through how your vehicle is used and the cover levels available. Get a quote for commercial motor insurance through upcover.
Frequently asked questions
Is business car insurance more expensive than personal car insurance?
The cost of a business policy depends on the vehicle, how it is used and who drives it. Your claims history, cover level and excess also play a part. An upcover representative or a broker can talk through quotes for business use.
Do I need to tell my insurer I use my car for work?
Declaring business use matters because a personal car policy may not respond to a claim during use the insurer was not told about. Insurers commonly ask about vehicle use on the application and at renewal. The PDS sets out how each insurer defines business use.
Does my ATO logbook decide whether my car counts as business use?
The ATO logbook is a tax record and sits apart from your insurer's definition of business use. The ATO logbook method lets sole traders and some partnerships claim car expenses, with a logbook kept for at least 12 continuous weeks. Insurers set their own definition of business use in the PDS.
Does business car insurance cover tools in a ute or van?
A commercial motor policy is designed to cover the vehicle, and any benefit for tools inside it is commonly limited. Tools carried to jobs are commonly insured under a separate tools of trade policy. Limits and conditions, such as a locked vehicle requirement, vary between policies.
Does car insurance for businesses cover injury to other people?
Car insurance for businesses is designed to cover damage to vehicles and property, depending on the cover level. Injury to people caused by your vehicle generally sits with compulsory third party insurance. CTP is paid through or alongside registration in each state and territory.
Can I insure a ute registered in my personal name for business use?
Whether a ute registered in your personal name can be insured for business use depends on the insurer. Insurers commonly ask whose name the vehicle is registered in and how it is used. upcover's guide covers whether to register your car under your business name or personal name.
The information in this article is general information only and does not take into account your objectives, financial situation or needs. Insurers set their own definitions of business use, state and territory schemes set the rules for compulsory third party insurance, and both can change. Before deciding whether a product is right for you, read the policy wording and its terms and conditions. For commercial motor vehicle insurance, also read the Product Disclosure Statement (PDS), Target Market Determination (TMD) and Financial Services Guide (FSG). upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.
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