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When Do I Need Commercial Vehicle Insurance?

Any van must be specifically insured using a commercial vehicle insurance policy if it is to be used for any purpose other than social, domestic and pleasure (SDP) use. Standard motor insurance, which covers car owners for commuting to work, does not extend to van owners unless they are strictly using their van for social or pleasure purposes and the vehicle is not engaged in business activity of any type.

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If your van is used solely for personal reasons, or for a non-profit hobby such as fishing or family transport, you may be able to be covered by a standard motor insurance policy. Even using a van to commute to a place of work requires a commercial policy.

There are also two legal requirements which make it mandatory to obtain commercial insurance when the vehicle is to be used for any business purpose. Firstly, the Road Traffic Act of 1989 states that all van owners must have suitable insurance policies in place or have made a deposit of £500,000 at the Supreme Court, an unlikely scenario for most owners.

There is also the Continuous Insurance Enforcement Act of 2011, which states that all vehicles in the UK must have valid insurance and must be taxed, regardless of whether it is kept on or off the road. To remove a vehicle from these restrictions, owners must apply for a Statutory Off Road Notification (SORN) and keep the vehicle away from public roads.

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So what could commercial vehicle insurance potentially provide? There are three main types of policy:

1. Carriage of own goods

This cover gives owners protection both for personal belongings carried in the vehicle and for any equipment or tools related to the business in question.

2. Carriage of goods for hire and reward

Also sometimes requiring a Goods in Transit policy, this type of insurance covers businesses offering delivery services, such as parcel or post-delivery across multiple locations.

3. Haulage

This covers businesses for deliveries and transportation via established trade routes and using fixed locations.

As with standard or motor trade insurance, there are different levels of cover available, from the comprehensive policies offering protection against fire, theft, damage to vehicles by third parties and by the driver(s) to third party cover which can also include protection for fire and theft.

Third party policies do not cover vehicles for damage caused by the owner or driver.

This insurance is applicable to vans, transit vehicles, tippers, skip Lorries, trucks and a wide range of commercial vehicles, and is available to most classes of driver, including inexperienced or young drivers, workers in the motor trade, or those in high risk occupations.